The CEO of the AIOFP, Peter Johnston, reports on “How the Financial Service Industry operates”.

Hi, below went to all Politicians to keep them informed on several issues that will arise over the next 12 months.

Please note the changes we badly want around the Exam and Risk are in the hands of the Minister, we are addressing them directly with his office. The good news is these changes are at the Ministers discretion not subject to legislative change.

We will keep you informed of progress.

Dear Parliamentarian, please allow us to brief you on the industry fundamentals which may assist to avoid the mistakes and misconceptions made by some in the recent past –

  1. The financial services industry is not a homogenized environment, it contains a diverse range of compatible but mostly diametrically opposed factions driven predominately by self – interest and different agendas.
  2. Due to this diversity and over 17 different Associations representing the various factions, it rarely has reached consensus on industry issues.
  3. Some Politicians have erroneously thought in the past that the industry should unite as one, this is problematic, it’s like expecting Qantas management to cooperate with TWU baggage handlers because they are all in the Airline Industry – it’s never going to happen.
  4. The market can be broadly divided into 2 major factions, PRODUCT and ADVICE. The Banks/Institutions/Super Managers manufacture/manage product and Financial Advisers charge a fee for service to consumers to advise on the best options. Please note, Advisers DO NOT manage product.
  5. Over the past 20 years $40 billion of products have failed which is the contentious issue with the Compensation Scheme of Last Resort [CSLR] Legislation, who pays? Considering Institutions are responsible for Product it must be them, Advisers should and do pay for poor strategic advice through AFCA.
  6. Politicians have made the mistake in the past of not appreciating the strong bond Advisers have with their clients. Considering Advisers have around 4 million consumers as clients and there are circa 18 million eligible voters, Advisers can potentially influence up to 20% of votes across all Electorates.
  7. If you are seeking information on Financial Advisers, the 3 best Associations for the 3 different categories of Advisers in our view are –
  • Self Managed Super Funds the SMSF Association and TSA.
  • Stockbrokers the SBIAA.
  • Risk/Financial Advisers the AIOFP.


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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