The CEO of the AIOFP, Peter Johnston, reports on the political facts for the May 21 election

During the last few weeks of an Election campaign confusion typically reigns supreme with all Politicians hoping voters will not remember the facts on negative issues affecting them or their party.

Currently the Morrison Government are using the ‘trust the devil you know’ narrative for a general theme but Senator Hume has particularly focused on it to disguise their track record in the Financial Services space.

We were warned in 2014 by a Senior Liberal Minister that then the ambitious Minister Frydenberg was a threat to the Financial Advice community. Mr Frydenberg wanted the top job and to do so he would need the major Liberal party Institutional donors support by giving them what they want.

As the last 8 years has clearly demonstrated, most Institutions wanted to remove Financial Advisers from the consumer relationship. This would allow digital advice to take over where LIF/FASEA/Compliance/Grandfathered Revenue ban legislation has been their weapons of choice to starve and intimidate Advisers out of the industry.

Considering Adviser numbers have dropped from around 30,000 to under 18,000 over the past 5 years, it has been indeed a very successful strategy. Furthermore, the Morrison Government are not relenting to this day as evidenced by no financial services legislative backdown in their current re – election campaign.

The most obviously question must be then if you don’t like what has happened to Financial Services over the past 8 years, it must be time for Governmental change.

We have been reliably informed that Mr Frydenberg has been remotely controlling the agenda from December 2014 until present day. Unfortunately for thousands of Advisers this callous purge has created an industry wide mental health crisis with numerous suicides amid broken individuals, businesses and families. The imminent release of the MENTAL HEALTH survey results will certainly support this position.

At the 2018 AIOFP AGM our members backed our Board to stand up to the Morrison Government. The 2 major [supposedly] Advice Associations FPA/AFA had been compromised by backing their policies and others were sitting on the fence. We took the initiative and had some significant success with educating all Politicians on the industry and influencing some legislative outcomes.

We decided that an Association that fights a brutal Government on behalf of its members leading into a Federal Election is preferred to an Association that cooperates with a brutal Government to implement draconian Legislation mid term and remains silent leading into a Federal Election.

If an Association is serious about effecting change, during an election period is the best opportunity to get a desired result. Over the next 19 days Politicians are literally pleading for their jobs, ironically and tragically something many Advisers have been doing for the past 8 years. Now is the time to strike…..

It seems the Morrison Government is trying to muddy the waters over the past decade or so with confusion over who is responsible for which legislation…..they are using the ‘better the devil you know’ scenario to shore up your vote.

Just in case you cannot remember the sequence of events over the past 14 years, let us remind you of what has happened – it’s called the scoreboard and it does not lie.

• 2007/8 – Storm Financial fall out creates the RIPOLL Enquiry conducted by ALP QLD backbencher Bernie Ripoll.
• 2010/13 – FOFA is formulated where product commission is banned, trials are grandfathered and Risk commissions are exempted by Minister Shorten.
• Late 2013 – Abbott Government wins the election, the final FOFA legislation is passed in 2014 supported by both sides and ALP had not proposed any further FOFA additions or amendments before the election.
• December 2014 – Minister Sinodinos is replaced by Minister Frydenberg, the ‘kill Adviser’ agenda emerges.
• September 2015 Minister Frydenberg moves into Natural Resources and puts in Minister O’Dywer who works closely with Frydenberg and his Chief of Staff Martin Codina [from Westpac/BT and FSC] behind the scenes.
• 2015 – The LIFE INSURANCE FRAMEWORK [LIF] legislation is backed by the FSC/FPA/AFA consortium working with Minister O’Dywer where it sails through both houses of Parliament into law. The Advice communities’ public image was poor thanks to unfairly being blamed for product failure and we get smashed.
• 2016 – The Financial Adviser Standards and Ethics Authority [FASEA] legislation was again backed by the FSC/FPA/AFA consortium with Minister O’Dywer passes into Law and we get smashed again.
• February 4^th 2019 The Royal Commission hands down the final report with 76 recommendations where Comm Hayne refuses to shake Frydenberg’s hand…..some think because his Report had been ‘adjusted’ to target Advisers and the mortgage industry as a favor for the Banks.
• April 2019 Minister O’Dywer leaves Parliament before the election after being pushed after a backlash over LIF/FASEA.
• 2019 Minister Hume takes over under the guidance of Treasurer Frydenberg again and continues the hard line against Advisers with further unnecessary compliance legislation.
• 2020 Minister Hume extends the FASEA education dates but no material change to the legislation.
• 2021 Minister Hume shuts down FASEA but no change to the legislation and the ASIC Review of the LIF legislation is deferred for 12 months [until conveniently after the election] – LIF is a disaster.
• December 2021 ALP announces its ‘10 – year experience’ education exemption at the AIOFP Conference, Minister Hume quickly matches it.
• January to April 2022 Minister Hume proposes NO change to their Advice agenda leading into the election but appoints the Advice inexperienced Lawyer Michelle Levy to review the industry and report in December 2022 [again conveniently after the election].
• April 2022 Shadow Stephen Jones announces his acceptance that Risk Commission has a role to play in the industry.

Summary

The ‘score board’ clearly demonstrates a distinct time gap between ALP’s FOFA legislation and the Morrison’s Government LIF/FASEA/Compliance regime, there is absolutely no congelation between the two pieces of work.

The ALP clearly had no further plans after FOFA, but the Coalition however had and still has a ‘kill Adviser’ agenda even leading into this election demonstrating how determined they are to please their supporters.

In the beginning all Politicians had a jaundice view of the Advice community resulting in legislation passing both houses unopposed. Over time this view has greatly moderated, the AIOFP will take some credit for educating all Politicians since 2018 on the role Advisers play with consumers and how other stakeholders are responsible for the most damaging aspect of the industry for consumers – product failure.

Currently the industry is in its worst state in living memory. The cost of advice for consumers is ridiculously high precluding those who need it most, the cost of risk cover has doubled for consumers, many advisers are leaving the industry in disgust, very few new applicants are joining, wide – spread mental health problems and suicides amongst the Advice community strongly suggests this Government is impervious to basic human suffering and consumer needs.

We are struggling to nominate one fair and industry favourable issue they have initiated……we think their time is up, most Governments are bereft of any new ideas after 3 terms regardless of their political persuasion.

The AIOFP cannot take a bipartisan political position when the Advice community, consumers and the Risk insurance industry have been so ruthlessly dealt with.

We are breaking the standard mold of Associations remaining politically bipartisan just in case we may want a Minister speaking at a future conference, we don’t call that supporting our members in a time of crisis in their lives.

We will call it as we see it…..and we think the Coalition should be put last on all ballots……obviously put who you like first and please encourage your clients to look at the Scoreboard and understand why they are ones who have paid thousands more for advice over the past 8 years.