In a note to members distributed on Tuesday, AIOFP executive director Peter Johnston said with the public growing dissatisfied with the government on a number of issues, including its response to the virus, it was likely that political will could turn in favour of more moderate regulation in the advice sector in months to come.
“There has been a number of significant political events over the past few months that should give the advice community hope that the worst of our poor treatment at the hands of politicians over the past 10 years is coming to an end,” Mr Johnston said.
“It appears the pendulum is starting to swing back to some badly needed middle ground and that the light at the end of the tunnel is intensifying.”
Mr Johnston pointed to recent public comments by MPs on both sides of the aisle indicating an awareness of the impact increasing regulation had had on the advice industry, which could play out as the Coalition geared up for the next federal election.
“For the first time in many years we have politicians publicly acknowledging that the current government and FASEA have gone too far with industry amendments. Shadow minister for financial services Stephen Jones has been vocal on this matter and Liberals Bert van Manen and senator Amanda Stoker have also been highly critical of FASEA’s conduct,” Mr Johnston said.
“The role and influence of the Financial Sector Union is becoming increasingly critical to the ALP political agenda going forward and its support of the advice industry.
“We are now only 12 months away from this government going into re-election mode for the 2022 election and senior ministers know that past colleagues have gone too far with a number of changes.”
Mr Johnston said the government’s current consultation around a compensation scheme of last resort would be a good test of its willingness to listen to industry feedback, while the expiration of current FASEA chair Catherine Walter’s term this year could also be a positive outcome for the industry.
“FASEA is meant to be an independent conflict-free authority acting in the best interests of consumers – instead we have a heavily conflicted oligarchy enforcing conditions onto the industry that are largely impractical and not in the best interests of consumers,” he said.
Advice is now like having a leaking tap and calling a plumber who is forced to charge you $150 every time they look at it. It’s just not commercial anymore – I didn’t say impossible but the nonsense that is being required when some one wants to just take money out or make minor changes to their situation…end result is like the plumber example, people will just seek out cheap options to do it themselves…
Maybe ….. maybe government and ASIC might understand the value we can add (without an 84 page advice document) to our clients wealth by stopping them from panic selling into a market bottom. Here is the thing (and i’m not supporting fee for no advice) but some clients who might have paid a commission, or have paid a small fee for a few years without having a formal advice document presented to them will be at home and comfortable because their ‘adviser’ would tell them to do something if it were needed. Some clients without an adviser would be dumping. In a strange way, clients who pay an adviser are paying for security which will stop them making a costly mistake in a time like this.
Again, i’m not endorsing FFNS. But i’m also not saying everyone needs an advice document every year. Some clients see value in passing their concerns to someone else and to be able to call up when it gets too much to check on what’s going on.
And that’s ok. It’s their money. They should be allowed to use it for whatever they want.
Or – We get the clients informed prior consent when they call and charge them thousands of dollars for an additional advice document outside of our agreed annual advice document and if they don’t want to pay (or we can’t get to all clients because they take so long) they can panic sell and we can then see how much additional stimulus will be needed by government to support markets and people who have destroyed their wealth (and forecast additional future Age Pension benefits as asset values will be lower), all because we operated as instructed to by policy makers.
I wonder how much wealth would be destroyed. Who can do the math?
Though how would you handle the situation where occasionally selling is the best option, with a view to regroup and buy later
I’m starting to like these guys….It’s just however I feel like I’m funding Peter Johnstons hobby in retirement, that being traveling to exotic destinations and putting on conferences….that’s great but in my retirement i won’t have a tax problem unlike Pete. but hey…….All that aside, I think in everything they’ve put out, they talk common sense and for that good on them.
Weak political and institutional leadership has destroyed this industry.
It will take just one Adele Ferguson style story to turn the tide again.
Do not worry just had to pay $11,000 for ASIC levy,talk about fee for no service.
Just f-cking wrong….what a con and rort.
Yep just paid $8k for our Levy.
We pay loads of taxes for so called Government services and to then have to double pay with a direct ASIC levy for our own useless Financial Police is a high crime.
Thanks Over Complicated Bloody ODwyer!!!
Try 55k
$500 levy for my TPB rego, $500 for the CAR, and another $500 for the license and $7K to ASIC… imagine what these levies will be like next year after giving everyone $750 in Corona cash handouts and we’re all still be dodgy evil financial planners. We’re easy targets. Isn’t it about time we stop relying on bodies like the FPA and or a licensee and have a genuine body that puts the needs of Australians and planners first.
ASIC’s position and way of dealing with things needs to be reviewed and overhauled. It’s ridiculous that policies, guidelines and requirements supposedly in place and enforced for the protection and best interests of clients have been designed and enforced with no consultation with the very clients/public they’re supposedly helping. The reality is we receive complaints from clients almost weekly – the complaints though are of ASIC’s requirements and documentation required to do even the most basic of tasks. Politicians need to grow a pair and actually stand up to and question ASIC, holding them to account.
Astounding that ASIC nor Politicians have hardly ever engaged Financial Advisers to determine how things could be done better…. Instead we get academics, lawyers and brain dead politicians deciding for us.
“FASEA is meant to be an independent conflict-free authority acting in the best interests of consumers – instead we have a heavily conflicted oligarchy enforcing conditions onto the industry that are largely impractical and not in the best interests of consumers,” What a great comment….so just how does just not cause major integrity concerns with Government MP’s?
This debacle has changed the perception of people in position of power. Rather than being impressed by a title or position, the response will be ” so #$ing what. Tell me what actions you have or haven’t taken. The dire problem is the quailty of leadership is so poor. Why would anyone give up a successful business to go into management or politics ? We are left with the egomaniacs with no idea.
You can live in hope, but I wouldn’t hold my breath!
Agreed, wishful thinking I believe. ASIC were so useless in dealing with the Banks Advice disasters they are now hell bent to prove how hard they can be. Problem is the Banks have left the Advice business and the remaining IFAs will be killed off by an over zealous ASIC trying to fix the Banks wrongs.
only when it affects voters are we seeing less clouded / opaque vision from our political masters . how about repealing the grandfathered commissions law so that we can continue (in many cases) to pay our staff? or at the very least extend the dead line by 18 months
All the political perks should be removed and exec salaries and bonuses substantially reduced. Seriously. These people in leadership have been found to be very very ordinary so why on earth do we give them such rich rewards ??
I don’t think so. Look at what is planned for the revamped FDS Statements !! Absolute madness and counter productive to public interest. You couldn’t make this stuff up.
I hope you are right. I’ve just gone to the FPA for help as its just all too much for a single practice adviser. Biz costs are too high, time is not there for what is required and there is a mountain of issues to try and deal with for clients on a daily basis.
You went to the FPA for help…let us know how that goes…
Love to know what the FPA can offer. Please advise .
ha ha ha ha ha….let me guess….you’re either an idiot, or it’s your first year in business. ha ha ha ha ha… That’s the funniest thing I’ve heard all day. … oh geez….What are they going to do…ha ha ha ha ha… Give you a 10% discount off your next FPA conference and a free scone…. Ha ha ha ha ha.. You poor misguided sole. Just go on linkedin post some comments and plenty of planners will reach out to you, including myself.
pushing any massive reforms through right now is madness. Yes, do the reforms, but perhaps wait another 12 months. No point destroying small FP businesses at a time when the corona virus is destroying businesses
12 months isn’t enough time, i said from the outset that any reform agenda needed 7 years lead time for business to adapt, if we had this with LIF we would be in a stronger position.
The ibdustry has been decimated. How do they unscramble this egg?