Dear Peter and other Liberal Parliamentarians, it has come to our attention that the Liberal Party is currently conducting an analytical review of the last election results to assess where the Party can improve its performance going forward.
In the interests of having an efficient Opposition to ensure we have strong Government, the Financial Adviser Community [Adviser] wants to give your process some direct and candid feedback on where your Party went so terribly wrong with its Financial Advice related policies.
It was so misguided you turned a traditionally Liberal orientated cohort of 30,000 Advisers and many of their 2 million plus clients vehemently against your Party.
Please consider the following –
- Over the past 30 years Advisers have been unfairly blamed for circa $40 billion of product failure losses for consumers where ASC/ASIC have released these products onto the market and the Institutions created/managed them. Advisers are also consumers of these products and expect efficient Government and Institutional conduct, we do not expect to be treated as the scapegoat for the inefficiencies of others. We believe this myth was conveniently used to justify a hard stance against our industry by your Party.
- Before the Institutions were disgraced in the Hayne Royal Commission for their ‘fees for no service’ fiasco and poor behavior with direct selling, they were hellbent on wanting to implement a digital robo advice regime for consumers where Advisers needed to be removed from the consumer relationship.
- We believe former Treasurer Frydenberg was the architect behind the agenda to remove Advisers to please the Liberal Party Institutional donors and this theme was managed by Chief of Staff Martin Codina and delivered by former Ministers O’Dywer and Hume.
- The strategy was to starve, frustrate and intimidate Advisers out of the industry with draconian Legislation – Financial Adviser Standards & Ethics Authority [FASEA], Life Insurance Framework [LIF] and other Compliance related Legislation were implemented with insidious intent.
- This action was and is highly successful where around 50% of the Adviser cohort has departed the industry [32,000 down to 17,000] over the past 5 years but it has come at great cost and anger towards your Party.
- Besides for the loss of around 30,000 predominately female administration support worker jobs, 29 suicides, widespread mental health issues and family trauma over practice value depreciation, the cost of advice has dramatically increased for Consumers.
- We suspect the cost of advice increases were initially intentional to justify the implementation of Digital advice but that has badly backfired for your party. The cost of advice has tripled over the past 5 years and the loss of Adviser numbers has priced those consumers who arguably need advice more than the wealthier, out of the market. The initial cost now for a new consumer to seek advice is over $5,000, up from $1500 5 years ago.
- The FASEA Exam concept is a bizarrely structured strategy to remove Advisers from the industry. Where else in the education global universe do students have to fail twice [not once] before they can sit for a final Exam attempt to stay in the industry? Over 1,000 predominately over 50’s Advisers are facing elimination from the industry on October 1stif they do not pass a MASTERS LEVEL 3 HOUR Exam on Ethics where the questions have been designed to be ambiguous at best to fail them. There are hundreds of age 60 plus Advisers who have physical complications with eyesight or IT skills who are stressed out because they have not sat for an exam for literally decades – but they are very good at their craft.
- It is an extreme, but we have an Adviser who has an accounting degree, been a CPA/Adviser for over 60 years, does not like IT so decided to not sit for the Exam hoping common sense will eventually prevail. He was banned by ASIC on 1/1/22 for giving Advice to his 60 year client base because we has not failed the Exam TWICE before this date. This is not ASIC’s fault, it is the bizarre legislation your Party put in place.
- FASEA the entity was eliminated by former Minister Hume but unfortunately the Legislation remains in place. Not sure what the former Minister was trying to achieve with that maneuver but the negativity to your Party did not subside and remains to this day.
- The above information is backed up by the latest Australian Financial Complaints Authority [AFCA] complaints numbers demonstrating that less than 1.5% of their 2021 circa 70,000 complaints were against Advisers and 98.5% against Institutions. Furthermore, ASIC’s 827 Paper surveyed over 2,000 Consumers where it revealed 89% are satisfied with their Adviser. Both inconvenient truths that did not suit your Party’s agenda.
Please note that it is the Liberal agenda that turned the Adviser community against your Party and fuelled the aggressive approach the AIOFP took to your marginal seats.
We cordially invite you to address our members at our Gold Coast Conference on DECEMBER 5 – 9TH about your Party’s view on our industry and small business in general. Minister Jones will also be in attendance at the event.
We look forward to your response in due course.
Regards.
Peter Johnston | Executive Director
Association of Independently Owned Financial Professionals
Suite 1211, 1 Queens Road, Melbourne VIC 3004
P 1800 111 203, d 03 9863 7574, m 0418 857 621
www.aiofp.net.au | Download my business card
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