Despite a recent focus on advocacy, consultation on the Financial Advice Association’s policy platform has highlighted the ongoing professionalism of financial advice as a priority, according to the latest FAAA member feedback.
After the merger between the Financial Planning Association and Association of Financial Advisers, the FAAA announced it would prioritise advocacy following member feedback.
But amidst canvassing member views for the policy platform through to 2030, FAAA government relations senior manager George John said it was a surprise that professionalism was considered the highest priority.
“One of the categories that we hadn’t even thought about was the ongoing professionalisation of financial advice and how do we make sure that the adviser that you hire in the year 2030 is better than the adviser a client would go into today,” John said during day two of FAAA Congress in Adelaide.
“Already out of those consultations and out of the survey we know a few things. We know for members…professionalism is their highest priority. The conversations that we’re having preface the idea that any adviser you go to should be the best adviser fit for you.”
Consultation commenced in early October and John said members have been direct about what they want from the association and the broad range of topics covered has been “astounding”.
“That’s why we thought we would walk away with probably about 17 different initiatives to focus on and we came up with 39,” John said. “We were shocked about where some of our blind spots had been.”
Juggling priorities
While professionalism may begin regaining some attention, advocacy remains a priority, with John and FAAA head of policy Phil Anderson updating members on the association’s advocacy work.
The association remained confident in the government’s approach to the Quality of Advice Review reforms, despite concerns action isn’t taken fast enough.
Simplified Statements of Advice and the removal of safe harbour steps were left out of the first QAR draft legislation, released last week by the government.
Anderson pointed to the Future of Financial Advice reforms, which didn’t see legislation introduced until 2013 despite the Ripoll report being handed down in 2009.
“A lot of people get really frustrated with how slowly things move and I always give an example of how legislative reform in the past does not happen overnight,” Anderson said.
Jones said consultation on SOAs and safe harbour was complete during last weeks draft legislation announcement and a further announcement was due after it passed cabinet approval.
Anderson said he wasn’t surprised by the delay.
“The advice document is how you demonstrate that you’ve met the best interest duty so until we’ve got the best interest duty documentation requirements clear and the objective test to that, then we’re not ready with the SOA outcome either,” Anderson said.
“I know the fact they weren’t in the package was very disappointing for many but there’s a lot of work that is being done.”
Outside of the QAR, John said the association will continue to push the government on the ASIC levy and transparency over the cost recovery implementation scheme, arguing the lack of transparency will build mistrust with the sectors the regulator has to enforce.
“Ultimately, we think the most successful argument we’ve made over the last few months when speaking to government is this lack of transparency about the way the ASIC funding levy is calculated breeds a lack of trust in ASIC,” John said.
“We as a profession need to be able to say we have trust in ASIC, in the way we’re administered… the way things are enforced across the profession.”
The FAAA revealed the ASIC adviser levy had been reduced by $8 million which would result in a $400 drop per adviser.
“The secrecy around this calculation does not help us to be able to do that,” John said.
“We as an association can not hand on heart say that we trust the way this has been calculated and we think that is damaging for the entirety of the profession and by extent damaging to financial services more broadly.”
What is the FAAA and Governments interpretation of Professionalism?
Is it the piece of paper you put on the wall to show you have a University degree?
Where does many years of real-life experience and great client service fit into the equation?
Highly “University” qualified Financial Planners will be well remunerated, though how many of them, upon finishing their studies, have become Wealth Protection specialists?
With twelve thousand risk specialists and holistic Advisers leaving the Industry and the cost of advised Life / Disability Insurances skyrocketing due to a lack of New Business, at what point will the light switch come on and the Government see that there is a multi-billion dollar problem, that like the NDIS costs rising to the point of jeopardizing the economy, this Insurance need gap is also growing out of control.
A $400 levy reduction is nice, though it does not fix the urgent things.
The current broken model that holds back the Wealth Protection Industry, that is costing Multi-Billions of dollars to the economy and ruining many thousands of Australians lives who now find themselves with massive debts and ongoing living costs they are unable to pay due to illness or disability, which also now will cost the Tax payers a fortune over the coming decades to help support them, was preventable and unless things change to make the provision of risk advice a viable option for Australians to enter the Industry and to just provide risk advice without the ridiculous shackles that the current University pathway throws up with unnecessary studies that have ZERO to do with the work that will be performed, then this hole will just continue to get deeper.