The AIOFP is delighted with the current positioning of the Advice Community, in both political and structural terms

Peter Johnston, reports The AIOFP is delighted with the current positioning of the Advice Community in both political and structural terms.

Minister Jones and the ALP National Executive honouring their pre-election pledges, and the 3 stage implementation process announced recently, is a very solid step in the right direction.

The perfect market structure of all manufacturers in one corner, with no advice capability and only managing product, and all independent Advisers in the other corner, working on a fee for service basis with consumers delivering advice, will probably never happen.

We must however, now not dwell on the past darker times, but learn from them to position our political strategy going forward.

Brief history It is fair to say the previous Government had a pre-conceived agenda against the Advice Community. We think it was initially targeted against the Risk Advisers but the legislation was eventually a ‘catch all’ culling strategy, that worked across the entire Adviser population unfortunately to great effect. It has displaced around 14,000 Advisers.

Even though FOFA evolved during the RUDD/GILLARD/RUDD 2007 – 2013 reign, it was completed under the ABBOTT Government in 2013/14. We believe ABBOTT was ambivalent towards our industry, but his successor TURNBULL, was in favour of the cull. FRYDENBERG seized upon the opportunity to fulfill his lofty political aspirations, by pleasing the major donors and ensuing the cull was successful. The 3 Associations were ‘enlisted’ to support the LIF/FASEA/Grandfathering ban/Compliance legislation and the rest is an ugly history of misery, suicide and widespread mental health issues. We believe that MORRISON was also ambivalent towards our industry, but Frydenberg and his chief of staff, Martin Codina, were the main drivers with HUME and O’DWYER political ‘puppets’.

What we have learnt – we believe the previous Government had such a pre-conceived agenda, to cull Advisers that they rarely [if ever] used the Department of TREASURY to assess their legislative agenda for fairness or equity. We also believe that the Senate failed to implement its normal market impact assessments and the legislation moved unhindered through both houses of Parliament. We were advised by a Liberal Back bencher, that just about all Politicians of all persuasions, knew very little about the Advice Community and virtually voted ‘blindly’ on the legislation.

What we are going to do about it – The AIOFP commenced an email education program for all Politicians in 2019, to keep them informed on any relevant issue within our industry. We also conducted small workshops in Parliament House for them to attend pre-COVID – we will continue with these activities. We will also continue with our lobbying of the Senate cross benchers, where we invite them to speak at our onshore conferences, Senators Jackie Lambie and Greens Peter Whish – Wilson attended our 2020 Hobart conference. Our next onshore conference is in Canberra Nov 29 – Dec 1st 2023, where we will be conducting a dinner at Parliament House and at our conference hotel with a range of Political guest speakers.

Two new and different initiatives involve Treasury and a key LIF market impact Paper, where we have commissioned prominent Financial Adviser and Academic Lionel Rodrigues to complete.

Unlike the previous Government, Minister Jones has taken a more pragmatic approach to our industry, by consulting with Treasury on their views to the various aspects of our industry. Our political strategy team has met with Treasury over the past 6 months, we are very impressed with their understanding of how our industry operates and their open-minded approach to resolving issues. We will continue to liaise with them on an ongoing basis.

The LIF Legislation has been an absolute disaster for ALL stakeholders, this is widely recognised by all associated with the financial services industry, and consumers whose premiums have doubled over the past 5 years. We need however, to get these facts understood by those who still hold the view that, ‘commissions should be banned in the Risk insurance industry’.

Recently, QAR Author Michele Levy, recommended that Risk commission should be retained due to the damage to the Nation’s under insurance position, in her final Report. But that is not enough. With all due respects to Ms Levy, if the current low risk commission structure has resulted in the current immense damage, how can you not recommend to substantially increase it?

A paper with all the empirical data and facts is needed to assist the ALP Cabinet and consumer bodies, to understand what an unmitigated disaster LIF has been.

Lionel Rodrigues has unique qualities of practical experience and academic achievement to deliver such a paper. Lionel has been an Adviser for over 30 years, and holds a Masters in Financial Advice/Law and an Accounting Degree. This Paper will be distributed across the Political spectrum, Treasury and all Consumer groups.


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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