Consumer-led campaign could halt red tape

In a paper released to members on Saturday, AIOFP director Peter Johnston said the association was launching a Consumer Adviser Referendum to alert clients to the reasons for the rising cost of advice.

The campaign would focus around four key issues that were increasing advice costs, namely the phasing out of commissions on insurance advice, the lack of tax deductibility available for advice fees, the removal of grandfathered commissions in 2021 and the general increase in regulatory costs as a result of factors such as the FASEA regime and ASIC supervisory levies.

Mr Johnston said it was important for the advice sector to learn from the mortgage broking industry, who had been successful in taking a consumer best interest approach to rolling back a key recommendation of the royal commission.

“This government has not and will not listen to advisers, but they certainly will [listen] to those who decide whether they are in power or not – that just happens to be your clients and consumers generally,” he said. 

“We are 20,000 advisers, employing 60,000 staff and we service around 4 million consumers – these are big enough numbers to intimidate.”

Mr Johnston said the association would shortly be distributing campaign kits to members detailing how clients – particularly those in marginal seats – could leverage their voting power to encourage a slower pace of reform in the advice sector.

The kits would include a short fact sheet around the four regulatory issues of focus, as well as a letter to be endorsed by clients which they could then deliver to their local member.

“COVID-19 and other political events of recent times has put the government under pressure and it is time for us to act,” Mr Johnston said.

“If the advice community can rally its clients to send a protest letter to their local MP about how the cost of compliance and the banning of grandfathered revenue is coming out of their pockets, it will be equally powerful to the mortgage platform.

“The most powerful influence in a politician’s career are consumers who decide the future of their seat and their party, and we potentially have over 4 million of them in our corner. We just need to harness this power, and advisers hold the key.”