Financial advisers across Australia are bankrolling a united effort to challenge regulatory reforms and the institutions that are already implementing Hayne’s recommendations.
The Advice Regulation Challenge (ARC) has been established by a number of industry leaders, including AIOFP executive director Peter Johnston, to form a united stand against what he describes as “the collective punishment of the advice community for broader problems in the financial services sector”.
The ARC is being funded by advisers and chaired by barrister Arwed Turon, with Melbourne Securities Corporation serving as trustee.
The ARC is currently in the process of raising $3 million in fighting funds and has hired lawyers Corrs Chambers Westgarth and constitutional barrister Peter Kulevski to represent it in the High Court, where advisers will argue that proposals to ban grandfathered revenue are unconstitutional.
The royal commission recommended banning grandfathered commissions, which are an important revenue stream for many advisers and were understood to be left alone for a time following a carve-out agreement in the FOFA reforms.
While the issue of grandfathered revenue is critical to the ARC campaign, Mr Johnston told ifa that the group’s strategy is about protecting the advice community.
“The advice community will be using its aggregated political and commercial power to challenge bad legislation and those institutions who have decided to not honour their current contractual obligation,” he said.
“They are working on the premise that a grandfathered revenue ban has already been legislated and the advisers will not take them on.”
The Melbourne-based adviser said the ARC has “a succinct message” for these institutions.
“If you do not honour your contractual obligations to advisers we will name and shame you across the advice community,” Mr Johnston warned.
“We will be calling on each and every manufacturer to declare their political position and answer a simple question: are you with or against the advice community?”
He explained that product providers that are in support of the advice community will be asked to sign a declaration of support and consider supporting the ARC fund.
“Those who support the advice community will be nominated on our website and can use the ARC Supporter logo on their marketing material,” Mr Johnston said.
Mr Johnston confirmed that the ARC has received support from both aligned and non-aligned advisers, a reflection that the entire financial advice community is “in the struggle together”.
More to come.
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