Post-RC change unlikely until after election, says AFA

In a note sent to members, AFA chief executive Philip Kewin noted that an election will be held by May at the latest, and expects the royal commission to be an issue in the election.

However, he said the industry body is also of the view that “very little legislative change is likely to happen prior to the election”.

“Whilst there is likely to be a lot of political support for the recommendations, it is important to appreciate that any legislative changes still need to be put in front of the Parliament and that this can be expected to take some time,” Mr Kewin said.

“We will firstly need to wait to see how the political parties respond to the final report.”

Mr Kewin also said the public interest around the royal commission final report will likely lead to a level of discussion among clients and consumers in general.

Hence, he said it is important that advisers are open with their clients on the implications of the report and the potential consequences for them.

“We all have a role to play in making sure that Australian consumers have faith in the financial advice sector,” Mr Kewin said.

“The next few months will be an important time to clearly articulate and demonstrate the value of financial advice.”

The AFA noted its concerns with what the royal commission would recommend on:

• Changes to the licensing regime and vertical integration,
• The banning of grandfathered commissions,
• Further restrictions on life insurance commissions, and
• Constraints on clients paying for ongoing advice from superannuation accounts.

“We are very conscious that the outcome of the royal commission recommendations will place further pressure on the financial advice community at the same time that we are dealing with the implications of the Professional Standards reforms and the FASEA requirements,” Mr Kewin said.

The royal commission final report is due to be handed to the government on Friday, 1 February and will be publicly released at 4:10pm on Monday, 4 February.

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].