The Association of Financial Advisers has warned members that support for an Extraordinary General Meeting may be considered a protest vote against the proposed Life Insurance Framework but would actually hamper any future policy work, and anchor the Association in the past.
A statement from AFA Chief Executive Brad Fox, published on Linkedin, stated the call for an EGM from a minority of members was a defining moment for the Association and had the potential to wind back its work and reputation with politicians, Government and other industry bodies.
“Either the clock will be wound back to the sorts of criticisms we received years ago in the FoFA debate. Back to a time when we had minimal influence. Or you can choose to support the AFA Board, helping the Association grow further in respect and relevance,” Fox said.
“Signing up to the call for an EGM may well be a protest vote against LIF, but the resolution it supports is a protest vote against the further advancement toward a profession and the AFA as a professional body,” he added.
“This will be a defining moment. A unified professional body, or an industry association anchored in the past,” Fox stated.
“This will be a defining moment. A unified professional body, or an industry association anchored in the past.”
In referencing the past, Fox said in 2009 – at the time of the Ripoll Inquiry – the AFA was a small association that was still recovering from a loss of relevance that had nearly wiped out the group, and its position within politics was marginal.
He said that since that time successive AFA boards had worked to drive the Association’s growth and it had earned a seat at the table when it came to advice related issues.
“We have moved from receiving criticism from a previous Minister as being passionate, but self-interested zealots to now being a respected professional association that brings facts, reason, foresight and influence to the table,” Fox said.
“We are in every financial advice consultation group and are sought out by government, treasury, regulators, the media and other professional associations on issues affecting financial advice.”
He also said this position and reputation had come about due to many years of ‘authentic, respectful and thoughtful advocacy’ and “…it has taken many deeds and the efforts of many principled, driven people”, which in turn had led to membership growth from 1300 in 2009 to 3500 at present.
He stressed that many of these gains would be lost as the AFA would be hamstrung on any major policy issues and would be regarded as unable to contribute to policy debates.
“If an EGM is called, and if the resolution being proposed is subsequently passed, members will have a Board that cannot fully exercise the rights to govern,” Fox said
“The proposed change to the AFA Constitution would remove the ability of your elected member Board to set the policy of the AFA. The Board will be forced to hold additional member general meetings to seek support before being able to agree or further negotiate terms with the Government, Opposition, minor parties and crossbenchers,” he added.
“This is akin to the AFA being asked to wait outside the room while the other parties make the decisions. The association would lose years of hard earned respect and relevance.”
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Those who signed up to the LICG are small business owners who are committed to providing advice which is accessible to all members of our community. They are concerned that a drive to severely reduce or eliminate commission as a means of payment for risk advice will price many out of the market. The LIF as it stands does not acknowledge these commercial realities and as such plays into the hands of vertically integrated businesses and direct insurers. This imbalance needs to be addressed. It is the right of the members to meet with the body which represents them to call for a meeting if they feel under or misrepresented in such vital discussions. Such concerns do not indicate an unwillingness to move forward and progress or to accept that certain elements seem destined to change, but there has been little to no push back or public comment by Mr Fox or the association in general to call out aspects of LIF that threaten consumers access to quality insurance advice and the many small businesses which currently provide it. As a long time adviser I am appalled at the lack of backbone shown by the AFA and the FPA to stand up for hard working self employed advisers who serve the community well.
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