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.”
How about including SoAs in that list also? I’ve lost count the number of times clients have complained about having to pay for a SoA and/or wait for an SoA to be produced in order to receive and action advice. They just want to be told an opinion of what to be do in simple english, know what it will cost and to go ahead with it. Their Best Interests aren’t being considered by ASIC’s version of Best Interests.
bring Terry M. Back. fan of terry m. but not tim m.(idiot)
These clowns still getting airtime? “This government has not and will not listen to advisers.” Senator Hume talking to us as are many other politicians. What’s the issue here?
The issue is … nothing significant has been changed to make the fin planning process more client / adviser friendly ending up in a profession that spends a considerable amount of time doing red tape activities rather than adding value to clients . Leading to increase costs that only a few can afford . That is the issue
Mr Johnston said “it was important for the advice sector to learn from the mortgage broking industry” – Seriously??
“These are big enough numbers to intimidate.” – and that’s how we want to behave!!
“We are 20,000 advisers, employing 60,000 staff and we service around 4 million consumers” – Not any WE I am part of. I will check their annual report and financials to see the real numbers.
This says so much about the PIFAO. Where is money from the constitutional challenge??
On one of their daughters weddings?
Whilst I also think the Grandfathered revenue ship has sailed, some consumers are only just becoming aware of this issue as their advisers tell them they can’t look after them any more. I was speaking to an elderly gentleman the other day, who now has no adviser and no advice as he doesn’t understand why suddenly everything has to change. I tried to explain it to him (as his adviser had), however he was unwilling to wear an upfront advice fee and incrased ongoing costs for something he already had in place with commissions (which was a low level ongoing service). He contacted a new adviser to request information but was told he wasn’t worth looking after as he didn’t have $350,000 to invest.
Peter at AIOFP deserves all credit for trying to make a difference, and I like the comments from people who provide alternative ideas. However actions are what matters, without this ideas mean nothing.
Criticising and complaining without acting is a poor response that will achieve nothing. Peter tries and takes action so whether you agree or not, if you don’t act, then you shouldn’t be complaining and criticising.
You can at least take on board the suggestions you do like and act on those, e.g. contacting your local members, and communicating to clients.
FYI commenting on here doesn’t count as acting.
[b]Well said![/b][b][/b]
So we all just sit back and hope that things will magically change? Rely upon on the Institutionally aligned Associations to protect us? We have been unfairly dealt with for 6 years by an Institutional agenda that will not change unless the Politicians feel threatened with losing their seat, and getting clients/consumers protesting is a positive start. The fairy Godmother has COVID 19 and will not come to our rescue……
Advisers can also highlight regulatory costs to consumers by separately itemising it in their invoices & FDSs. Eg…
Ongoing services $2000
Regulatory overhead $1000
GST $300
Total $3300
Great idea. It’s probably $4,400 GST inclusive – but still a very sound idea.
A good idea in principle, destroyed by the inclusion of grandfathered commissions. Most advisers don’t support the retention of grandfathered commissions, let alone consumers or politicians.
If this initiative was just focused on the increased complexity and costs of advice due to regulatory overhead, then it might work. No-one (except bureaucrats) likes excessive red tape. Perhaps FPA/AFA could try something similar but just focus on the red tape issues. A simpler, more palatable message for consumers is far more likely to succeed.
Grandfathered comms will phase out in the next few years – not sure why this is still a battle being fought at this level…
Politicians are too stupid to understand how their reforms will hurt average Australians over the long term. Basically they are delusional, happily living their tax payer funded life in the Canberra bubble
Um…no thanks.
The mortgage broking industry succeeded in its campaign because it ran during a period of intense sensitivity for politicians – the lead up to the last federal election – and it had tangible evidence based on customer feedback to support its case. I can’t see how the proposed consumer-led campaign will achieve the same outcome. Ultimately, the only evidence politicians and regulators are going to pay attention to is if all clients say they are overwhelmingly happy with the outcomes they’re achieving working with their advisers. Capturing that voice will be far more powerful than politically motivated campaigns that have nothing to do with the quality of the advice being delivered. The sooner the industry recognises this the better for all advisers.
Tell’em their drea.ing
The boat has set sail!
This is a good strategy from the AIOFP. We have been encouraging clients we have had to ‘’part ways’’ with to let their local Federal member and State Senator know the reasons why but this, done industry wide will have far more clout.
It’s worth considering, to centralise this uprising, to create an epetition which could be provided to advisers/practices (licencees?) to make available to their clients to electronically sign etc. This would speed up the process and provide a single point to monitor/control. All it needs is for advisers to ”band together” to commit to the strategy.
I doubt this is an effective strategy…. I could be wrong but I really doubt people will change who they vote for because their advice fees go up. Politicians have bigger issues to deal with and will not be intimidated by this type of marginally insignificant campaign. AIOFP should be helping advisers transition to the present not holding on to the past.
Agree Grandfathered Comms is the past and we do need to move on from that, more time should have been given in the change from Grandfathered to dead grandfathered.
[b]Adviser should not have to continue to transition to ever increasing STRANGULATION by BS REGS. [/b][b][/b]
1) The absolute waste of time in double, tripple FDS / Optin / Ongoing Fee Agreements then the Institutions wanting another form signed too.
2) How about 5 different CPD calculations. Not even Monty Python could come up with 5 different ways that ASIC, FARSEA, FPA, TPB, SMSFA, etc all record the same bloody hour of CPD differently, seriously WTF are they thinking or not thinking clearly.
Two great examples of how over the top stupid BS REGS have become and HAVE to change.
if you are being paid to waste time, this is the farce you come up with.
thanks for the laugh though what a joke this has all become. totally incoherent, not in the best interest of anyone least the public. I tell clients and they say it’s a total disaster but it’s not just financial planning, it’s energy companies too Australia is a shit fight no wonder we are going down the tube
Practitioners have not been listened to at all during the process so maybe consumers can tell their message to the government. “Let my adviser get on with doing the job that I pay him or her to do which is to provide advice in MY best interests and stop bogging both of us down. I know what I pay my adviser as it comes out of my account and I see the monthly statement I choose to keep up the service as I get value out of it”.
I hope this goes better than the attempted constitutional challenge