The Advice Profession is in a precarious position that it may never recover from unless….

Hi, below is an email sent to all Federal Politicians urgently seeking their attention to the Education and CSLR ‘CLIFF’ facing the Advice Profession.

With only 15 Parliamentary sitting days left for both Houses in 2025 to amend legislation, it should be very concerning for all Financial Advisers.

We encourage all to contact their local Federal member and use this email content to inject some urgency into proceedings.

Furthermore, we should not discount conducting an October rally in front of Parliament House to bring some attention to our plight.

Will keep you informed of progress.

Dear Parliamentarian,

The Advice Profession is in a precarious position that it may never recover from unless there is some urgent Federal Government intervention – there are only 15 Parliamentary sitting days left to avoid a seriously debilitating event.

January 1^st 2026 is a critical time line where *2,000 – 4,000 Financial Advisers are facing removal from the Profession over confusing Educational requirements and another *5,000 Financial Advisers are also expected to depart over the Compensation Scheme of Last Resort [CSLR] current and future impact. The worst case scenario is 9,000 Financial Advisers departing the Profession during 2026 leaving around 3,000 delivering advice to consumers.

*ASIC has recently quoted the above expected Education departure numbers and the AIOFP surveyed members at our recent August 19 – 22^nd conference about their intentions if CSLR remains in its current form, 30% indicated they will be departing the industry in early 2026.

The current ASIC register states a total registration of 15,610 people, comprising 6,426 Advisers with approved qualifications, 4,580 Advisers on the Experienced Pathway and 4,604 are yet to meet the standard. We estimate around 3,000 people of the total are para planners or performing related activities, reducing the number giving advice to consumers around 12,500 at this moment in time.

Education Concerns There is widespread confusion over the current educational requirements and former Minister Jones’ announcement on February 10th 2025 before his retirement has only further complicated the situation.

Preferred Outcome– We are requesting the deadline is moved forward 12 months to 1/1/2027 and have an ASIC led intensive on – line education program established for current and prospective Advisers attendance to understand the circumstances.

CSLR Concerns– CSLR in its original 2017 Ramsay Review and 2019 Royal Commission recommended form had bipartisan and widespread Advice Profession support. Unfortunately the fabric of the recommended format was tampered with in the Senate [2024] to protect the interests of the financial Institutions and other stakeholders who did not want to be held to account over their conduct.This political manipulation then placed the responsibility of Financial Product failure onto the Advice Profession and their clients, an unfathomably unfair outcome.

With the exception of Vertically Integrated Advice practices [which are a minority and should be banned in the AIOFP’s view], Financial Advisers are not involved with the market release, management or ownership of Financial Products. ASIC/APRA, Custodians, Trustees, Research Houses, Administration platforms and Auditors involvement with the performance of Financial Products are now being examined in light of the recent First Guardian/Sheild/Dixon product failures. ASIC have finally commenced an investigation into the role of Equity Trustees, Macquarie and Netwealth play with product failure.

Financial Advisers, usually the ‘low hanging fruit’ victims are pleased with this development.

The 2011/12 Senate Enquiry into the 2009 $176 million TRIO Fraud heavily criticised the roles of ASIC/APRA/Custodian/Trustees/Research Houses/Auditors but inexplicably the Financial Advisers involved were blamed for the failure post Enquiry by the press and victimised by ASIC. It should be noted APRA organised compensation and a later Treasury version of the Senate Enquiry favoured Government departments and criticised Advisers, no surprise there.

This ongoing injustice of blaming Advisers over the past 30+ years has allowed these other stakeholders to escape scrutiny and accountability with their role, therefore resulting in minimal behavioural change.

It is no mere coincidence that the reasons for the 2009 TRIO Fraud are very similar to the current First Guardian/Shield scenario….16 years hence, flawed habits/procedures have not change but the attempted scapegoating of Financial Advisers remains –it is time for the elimination of this false narrative to protect Consumers and the Advice Profession.

Preferred Outcome– CSLR legislation needs to be realigned with the original recommendations of the Ramsay Review and Commissioner Hayne where the levy funding is spread across ALL Financial Services industry stakeholders NOT just Financial Advisers. If these other stakeholders are held to account for their behaviour with levy participation they will more than likely adjust their conduct, a great outcome for Consumer protection and the industry in general.

We suggest at least the other 5 stakeholders are included in the levy payments – Trustees, Custodians, Research Houses, Platform Administration services and Auditors, we also suggest an annual levy fee across the entire Funds Management industry is implemented to protect Consumers.

Summary –it is fair to say the Advice Profession has been poorly treated over the past 30 years by Canberra, some of this treatment has been fair and needed but the majority has been politically motivated with devastating results that has not been in the best interests of Consumers or the Profession.

CSLR and the 1/1/2026 Education ‘cliff’ will be devastating for Consumers and the Profession unless the above issues are addressed.

With 30% of current Practice Directors indicating they will leave the Profession at 1/1/26 over the CSLR cost impost going forward,their CSLR liability is then passed onto those who remain in the Profession.

With no new Advisers expected to join the Profession [for very obvious reasons], up to 4,000 eliminated over Education confusion, and the deregistration of those who don’t give advice to avoid the CSLR levy, this scenario may incite a ‘rush to the door’ to avoid CSLR liabilities getting out of control, an ‘Armageddon’ scenario is quite possible for the Profession during 2026.

The recent revelations of ANZ Bank ‘s poor behaviour over the decades and ASIC response is symbolic of the ongoing flaws with regulation in this country. No Banking person will get charged, the shareholders will pay the fine and nothing changes with the Bank culture as those responsible are moved to another department to continue their poor behaviour. It is time the CEO and Directors are personally held to account by ASIC.

This scenario is very similar to why product failure has not been curtailed over the years. ASIC has unfairly blamed the Advice Profession whilst allowing Trustees, Custodians, Research Houses, Auditors and Institutional Owners to escape accountability, therefore bad habits/culture do not change.

More importantly, this blame strategy has also allowed ASIC to escape accountability for their behaviour.

The next emerging disaster is the debilitating affects the Life Insurance Framework [LIF] Legislation has had on the Risk Insurance industry, Consumers and the Nations underinsurance position.

Please do not hesitate to contact us if further information is required.