The CEO of the AIOFP, Peter Johnston, reports on an open letter to Michelle Levy.

Dear Parliamentarian, below is an open letter to QAR Author Michelle Levy about poor Bank management over the years that has led to Consumer losses and why Banks should stay out of Advice.

Fundamentally, over the past 20 years consumers would have been better off leaving their savings in cash instead of getting involved with many Bank owned funds [see attached].

This question of $40 billion of failed funds is at the heart of the CSLR and why both sides of politics have back flipped once in power…..consumers deserve better.

Dear Miss Levy, as you may know we have been critical of the QAR process from the outset.

We considered it to be a politically driven diversionary tactic by former Minister Hume to deflect attention away from her government’s extremely poor handling of our industry leading into the last federal election.

Thankfully, they got exactly what they deserved with the election result.

We have been critical of your tendency of suggesting at times some good ideas but continually linking it to being contingent upon allowing the institutions back into advice regulated under a ‘best advice’ regime. We think Banks/Institutions [Banks] should stay out of advice of any description and remain with what they do best, standard banking/administration/management activities.

In fact, when you consider how poorly the Banks have performed in the wealth space over the years with inflicting consumer capital losses, no advice will be better than getting advice from them for most consumers.

Attached here is clear evidence of how the Banks/institutions have managed their products since 2006 and specifically incorporating the GFC crisis. Their management skills have been woeful, the funds have generally performed poorly with capital losses and expensive compared to other options like the Industry Superannuation funds sector. As you will see, there are 191 funds with $43 Billion of consumers capital either failed, frozen or impaired.

We hastened to add that the Advice community has been inexplicably blamed for these failures whilst the Institutions and regulators run for legal cover….as you no doubt know, Advisers just recommend them, ASIC register them, Banks/custodians/trustees manage them and Research Houses rate them.

Considering the world is likely to be entering into another GFC similar event in 2023, we would suggest consumers are better to leave their cash in a savings account rather than running to the Banks looking for solutions.

The perennially discussed ridiculous levels of unnecessary compliance loaded onto Advisers and consumers over the past 7 years could be resolved in an afternoon between ASIC and representatives of the Advice industry. This should reduce the cost of advice by at least 50% and even further if other options are implemented.

We hope this information will assist with your final report to Government.


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 | Download my business card

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