During the recent Federal election campaign, our poll revealed the vast majority of financial advisers would prefer to see the Coalition form government.
But with the return of the Labor Government finally confirmed, our poll question this week is:
To what extent will the return of the Labor Government impact the future value of your advice practice?
Given 88% of the hundreds of advisers who took part in our poll said they preferred a Coalition government, does this translate into advisers believing the value of their practice will diminish as Labor’s Future of Financial Advice (FoFA) reform proposals take effect? Or was it more a view that the value of their advice practice would have a better prospect for growth under a Coalition Government?
The banning of commissions for investment and superannuation advice is on track to be implemented from 1 July 2012. Will this have a positive, neutral or negative impact on the value of your advice practice?
There are also the other key FoFA reform and Cooper Review proposals such as clients having the ability to ‘opt in’ to future advice, the enshrinement of an adviser’s ‘fiduciary duty’ into law and the banning of all commissions from the superannuation sector.
Whatever your view, we will be sending the results of this poll, and your comments, to the Federal Treasury as part of the Government’s industry consultation process.
The following extract is a response to riskinfo from the Treasury after we provided it with your responses to our recent poll on whether payment of commissions on risk products represented a conflict of interest to the consumer:
“Thank you very much for providing us with a document capturing the views of so many stakeholders in respect to commissions and life insurance…We will be looking at this issue in greater detail next year – this information provides a good grounding in preparation for that.”
As we have previously said, now is the time to have your voice heard. Tell us what you think and we will make sure your opinions are included in the industry consultation process…
My business is 50% risk and 50% financial planning. I have been in business for 25 years. I sell insurance to the needs of my clients. I have been doing this for 25 years. I still do not know what perecntages commissions are paid on risk business, because i don’t care. I know i will get paid a commission, but i have never ever ever ever recommended a product because one paid more than the other. This view is shared by many many risk advisers. So why are they wanting to ban commissions. Of what relevence is it to the advice. None of my clients ever question anything about the commissions, and as we know that is all disclosed. Who is driving this agenda? Financial planners, unions, i am not sure. There is no issue. The same could also be said about financial planning commissions. I have never taken a 3% entry fee. I usually take 1 to 1.5%. Why did we have a money wasting enquiry, when all that was needed to do was limit the entry fee to say 1%. And if you want to charge a fee, well, you can. Don’t get me wrong i am now chaging fees, but only because we will have to. And also there is no cap on fees, so the unscrupulous advisers will be charging what they like. So do fees mean there won’t be crooks. I don’t think so.
The new minority government represents an opportunity for the financial planning community to put it’s views to the new powerful members of federal parliament. I suggest all self employed financial planners in the federal electorates of New England and Lyne make an appointment over the course of the next few months to visit Tony Windsor and Rob Oakeshott and discuss the implications of the Labor Government’s proposed Opt in rules and the banning of risk commissions on the planners’ businesses (including staff) and clients. When the independent MPs realise the impact I’m sure they’ll persuade the Minister to make a sensible commercial decision that doesn’t destroy the legitimate livelihood of so many people who day in day out are trying to do the right thing for their clients and community! I’ll be suggesting to the AFA and the FPA that a lobbying campaign from their members in these electorates be commenced immediately. Hopefully they will take up my suggestion to prevent these unreasonable changes being foistered on all of us!
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