Addressing the recent AIOFP conference in Hobart, John Hewson said the government’s regulatory approach to the advice sector was “counterproductive” but that it was important the industry band together to argue a case for how the growing compliance burden could be eased.
“You’ve got a government attitude to this industry which is counterproductive and ill-informed – they’re not paying attention to the reality of your circumstances,” Mr Hewson said.
“In my experience with government, the best thing to do is have a very clear proposition of what you want and argue the case on the basis of substance, as hard as that is, because if you don’t they’ll solve it for you. They will define what should be a decent income for a financial planner, if indeed they want financial planning to persist as an industry at all.”
Mr Hewson said the increasing number of politicians with no real-world experience was having an impact on the quality of policy development, and the only way this could be countered was by the industry regularly and simply stating its case to the minister of the day.
“The sort of skill sets you need to win preselection in any of the major parties are not the skills you’re going to need to run a major department, so somebody will do very well at organising votes to get preselected and they end up running a multi-billion dollar department with zero real life experience,” he said.
“In terms of your industry, you’d easily say where’s the strategic thinking. There’s been a lot of knee-jerk reaction to certain instances that have been identified and a perception of some politicians that the industry has been out there to rip off unsuspecting investors, yet there is no strategic thinking going forward.
“They take short-term decisions with no particular understanding of this industry and where this industry should go. Having a finite proposal for what you want as an industry and what you want them to do to make that framework work is the only way to beat it, and you’ve got to be prepared to argue that case at all levels of the political process.”
Hewson’s right – we have been trapped fighting tactical battle after tactical battle without any strategic direction.
But a unified, strategic direction for this industry? Not likely.
And so long as that continues, we’ll never get any traction with the powers that be.
For what it’s worth, I’m an FPA member because at least their policy direction has some semblance of vision in it, it’s not just the old guard bleating about getting their commissions back, or pining for the days of yore.
Strategic direction…Hewson, you’ve left me laughing today, that’s for sure.
What John Hewson says is spot on, but pretty funny…….did he forget that before he was elected he was an RBA official and an economic adviser to Government. Does he think these really qualify as real world experiences?
Not bad from a bloke who couldn’t work out the GST on a cake.
Exactly, how’s the Strategic Thinking going John on how to explain the GST? Worked that one out yet buddy?
FPA members are shameful individuals. You’ve got an ex liberal minister concerned about affordable advice, out blasting his own party saying you’re being ripped, and you have zero representation. Where is your representative bodies? That’s right, out having a long lunch with AwareSuper signing up new planners in bulk and taking instructions from Insto’s. How have you allowed this situation to continue.
Spot on! How any IFA supports the FPA is beyond me
100%, never have and never will
All the financial advice industry (associations and dealer groups) needs to do is work together rather pushing their own individual agendas.
If need be split up into Insurance Advice lobby and Investment Advice lobby.
The statement “if they want the industry to continue at all” says it all
The only strategic thinking you will get from Morrison and Frydnberg is how can i get votes….end of story….NO Votes/ No care.
That’s why Advisers need to encourage clients to vote against these clowns.
Frydenberg OUT !!!!
LNP out !!!!!!
PLEASE, can we have John Hewson chair a joint commitee formed from ALL the industry bodies to detail an exact UNIFIED position and then have him and CEO’s of these bodies AND CEO’s from the insurance companies who are all getting killed atm present this and lobby the SH!T out of these stupid pollies.
The AFA/FPA have been taking their solutions to Canberra but the politicians haven’t been listening. Is that more a reflection on the AFA/FPA lobbying efforts than the politicians themselves?
The FPA is the voice of large insto’s clear and simple. People only join the FPA because their large Insto employer signs them up. So who is left to represent advisers?
I agree with you John, but no politician is going to stick their neck out for financial planning – No votes in it….. Unfortunately, we were very unified when the first lot of FOFA reforms came in, to our detriment. If we had adopted them at the start there would have been nothing to see at the RC… Just got to ride it out and charge more.
Well said Mr Hewson.
Mr Hewson has just gone up in my estimation.
One could only wish the 8 years of current LNP had any Strategic thinking at All…… besides how to save their own butts & jobs.
Disgusted in LNP and will be using our AFSLs 400 clients to be encouraged to vote against them.
Sick of the constant knives in the back from LNP.
Sick of exponential increases in BS Regs and Red Tape Advice costs.
Sick of useless political lies to fix things from the
this LNP and then do the exact opposite and make it worse.
Doing the same. Very thought I would get political in life but I have had enough of the LNP. Voted all my life for them – never ever again.
Be careful what you wish for you two. Remember what Shorten promised by adopting all the recommendations from Hayne. Then Stephen Jones (ALP Financial Services Shadow Minister) said straight out he had no time for commissions on risk insurance. Riskies like me would be out of a job, instead of just hanging in there. Better the devil you know…
I get the sentiment, but be careful of what you wish for. Labor will be LNP on steroids when it comes to trashing the FP industry.
Don’t be stupid!!! Labor would be so much worse!
Labor just want to win votes at any cost and are not really interested in making things better.
Exhibit A: Labor wanted to scrap Franking Credits and then when the lost, they reneged on their franking credits policy.
Exhibit B: Labor opposed Stopping the Boats and then when they lost and it worked the reneged and acknowledged that Stopping the Boats worked at putting people smugglers out of business and minimising deaths at sea.
I get it – Labor is no friend of Privately owned Financial Planner (but lovers Industry Super, the money donated to Labor from it and the ability to control Commerce via Industry Supers huge capital market control).
Trouble is, Liberal and Nationals are busy trying to win the votes of CHOICE, ASIC, FSC etc who will never vote for them away, losing members mid term, implementing the RC in full etc etc. Liberals have made promises to FP before – and not delivered. I will not vote Labor etc but nor will I ever vote Liberals again.
Easy to see how Trump got in.
Good point re Trump. A key driver of his support was backlash against the stranglehold lobbyists and vested interest groups had over both major parties. Many ordinary citizens no longer felt represented. Australian citizens are becoming similarly disenfranchised.
When your clients want to leave you because you’re encouraging them to effectively vote Labor into government, please give them my number. And don’t let the door hit you on the way out.
How silly!!!???!!!
That would place you at the top of the pile of the most reckless AFSL I’ve come across. If you think this is bad, wait until you see Labor get a hold of it. They wanted to ban risk comms and trail comms, and most likely legislate the spine out of us so IFA’s cease to exist.
The review announced for the coming 12 months seems positive.