A campaign against proposed changes to the government’s insurance reforms has erupted with an AFA member calling for other AFA members to support an extraordinary general meeting (EGM) to overturn the association’s support for the legislative changes.
AFA member and Dunsford Financial Planning managing director, Mark Dunsford, sent a message to the 2500-strong email list of the anti-LIF grouping, the Life Insurance Customer Group (LICG), asking for support for an EGM.
“The LIF legislation will have unnecessary catastrophic effects on advisers while making the FSC/banks even more money,” Dunsford said.
“Yet the AFA remarkably failed to put its unwarranted support for the LIF to the vote of its members. Without a mandate or permission from its members, the AFA Board wrongly supported the FSC’s unacceptable and self-serving position on LIF.”
FSC ‘stitch-up’
Dunsford describes the legislation as “nothing less than a stitch-up by the FSC.” He said it will halve advisers’ income. He added that politicians have said that if the AFA withdraws its support from the LIF, they would have reason to reconsider the legislation.
Dunsford called for LICG’s AFA members to support his call for an EGM. He proposed the AFA withdraw its LIF support, and “oppose the LIF in its current form because it will provide poor and detrimental outcomes for consumers”.
Dunsford asked AFA members to sign an AFA Resolution Form.
The AFA’s chief executive officer, Brad Fox (pictured), said for an EGM to be held, Dunsford needed 100 voting members of the AFA to support his call for an EGM, which would then need to be held within 60 days.
If more than 75 per cent voted in favour of Dunsford’s resolution, the AFA would be bound by the motion and need to amend its constitution and oppose the LIF legislation.
“We’re not sharing any views until we take a little more advice,” Fox said. He said the AFA will “will follow the constitution of the AFA, its bylaws and the Corporations Act,” if it receives a valid resolution from members.
Fox said the AFA was in its 70th year of representing advisers.
“We will continue to do that in the long-term best interests of the advice profession and the wider community,” he said.
The LIF issue is not believed to have been raised as a concern for AFA members at recent briefings.
Risk professionals let down by ‘the meaning of LIF’
LICG was formed at the end of last year. A spokesperson says the organisation is a group of “like-minded risk professionals” who felt let down by the industry association’s stance on LIF. “As risk advisors we knew they were patently wrong, unfair, unproven and absolutely not in the consumers’ best interest.”
The grouping includes Dunsford; GJO Financial Services CEO, Greg Owen; Lambert Investment’s managing director Ron Lambert; and Life Insurance Direct’s CEO Russell Cain.
The spokesperson says the LICG’s goal is to secure an insurance industry review.
“We want the so-called reforms to be stopped at the moment and put into a full review,” the spokesperson said.
They are calling for a principles-based discussion “not political short-term decisions that appease one body”.
LICG believes that a series of reports from ASIC, John Trowbridge, and David Murray’s Financial Services Inquiry lacked independence and were tainted by lobbying from the Financial Services Council (FSC).
The group is self-funding the organisation and legal fees. It has secured 2500 names on its database, mostly populated by AFA and FPA members.
The spokesperson says the LICG has met several times with the AFA and FPA. “They just didn’t want to listen.”
It has also been lobbying ministers including Minister for Revenue and Financial Services, Kelly O’Dwyer, and the spokesperson says the LICG has received support from former financial adviser, MP, Bert van Manen.
“He knows more than anyone [in parliament] what it takes to be a financial planner,” the spokesperson said.
“All those decision makers have never had that experience.”
LICG has also been meeting with regulators, including ASIC.
