The AFA has detailed the policy agenda it presented to the new Minister responsible for Financial Services and Superannuation, Senator Jane Hume.
In its most recent member update, the AFA’s GM Policy and Professionalism, Phil Anderson, shared with members that senior representatives from both the FPA and AFA Board and Executive met with Senator Hume in mid-June. He said this was the first meeting with the new Minister since the May 18 federal election.
Noting the positive nature of joining with the FPA to present a united voice on key issues currently facing the financial advice profession, Anderson reported the joint representation had the opportunity to address the following policy issues:
- The timeframe to complete the FASEA Exam and education requirements
- The lack of recognition for experience, through CPD and historical courses
- The timing and uncertainty with the commencement of Code Monitoring, in the context of the Royal Commission recommendation for a single central disciplinary body
- APRA and ASIC’s letter to super fund trustee oversight of adviser ongoing fee charging, and the impracticality of a separate trustee driven authorisation (or Opt-in) process
- Grandfathered commissions and the fact that some product providers are writing directly to clients to invite them to turn it off and others are moving well in advance of legislation or the Government’s proposed deadline
- The lack of specific details on the scope of the 2021 ASIC review of life insurance advice
In what he characterised as a very constructive first meeting, Anderson said the exchange clearly set out what the two Associations see as the key issues to resolve over the next few months and beyond.
“This is just part of our overall advocacy campaign,” said Anderson, adding, “We are also aware of a number of AFA members who are already proactively talking to their local member of Federal Parliament. We encourage this activity and will shortly provide more information in support of these meetings.”
The key issues above don’t seem to cover the lowering of commissions and this 2 year clawback. Am I correct in assuming that both the AFA and FPA are taking things a step at a time and that the issues I have just mentioned will be raised later by the AFA and FPA? Would someone from either or both associations please confirm either way.
Regarding the 2 year clawback – I know there have been comments in risk info from advisers who seem to support the 2 year clawback if an adviser churns policies within that period; as opposed to advisers being forced to help their clients transfer policies to another insurer because of massive premium increases after the first 12 months. But how could this be monitored? Who decides whether the transferring of policies within 2 years is the result of churning by an adviser or a premium increase by the insurer? My personal belief is that things should go back to the way they were – a 1 year responsibility period. And that also includes reinstating commissions. If these issues are not on the AFA and FPA radar to be addressed, then I fear we will still see a mass exodus of quality adviers in the next few years.
Having said that, it is good that the associations have looked to address the lack of recognition around advisers’ experience and past training.
I’d like to think this meeting with the new FS&S Minister will deliver a return to business arrangements prior to all of the government’s incursions into our industry.
However, I don’t believe in the tooth fairy and feel, I’m sure, as most of my fellow readers do, that the new minister will do whatever’s expedient to retain her position. The FPA and AFA were likely well-meaning but their representatives might just as well have stayed home. Time will tell.
My take on all this is like a traffic cop on Valium arms are going everywhere but nothing is really happening certainly not at an acceptable pace
I seriously doubt anything constructive for advisers will come from all this
Hope I’m wrong and I realise there was an election to get through but really how far have we gone to address the commission and 2 year clawback that is the advisers current concern
No one is keen to start exams ( particularly if your over 55 ) as you have no idea what to expect and if the remuneration process will be hit yet again
If we knew where we stood we might be more receptive to education
Unfortunately we’ve been hearing all this rhetoric for
nearly 10 years. Again (and there has
been many experienced Advisers say this) the problem is that, whenever the AFA
or the FPA or anyone on a stage refers to the ‘Industry’; as an audience
member, you are never quite sure whether the source of the information is
referencing Insurance or Investment, although over the years probably 80%+ of
the time the references have been made towards Investment. I believe this is the single biggest reason
Risk has been forgotten…Risk receives lip service from the Investment people
and I’d almost go as far to suggest Risk receives lip services from quite a
number of areas. You only have to read Commissioner
Hayne’s comments to see that he doesn’t even believe in Risk at all. He didn’t give lip service…he actually seemed
to dismiss what Riskies do altogether sighting that most people have adequate
insurance in their super funds….I mean REALLY!!! Enough said about that…onto the AFA and this
article…and please read the rest of the insight with purely Risk as
front-and-centre…as much as I like seeing the AFA down in Canberra pushing the
industry’s cause, I fear that the Politicians just don’t care, as they have much
bigger problems than ours for them to solve.
I’m also concerned the 2 year claw-back and reducing revenue have not made
the agenda. Phil refers to the “lack
of specific details on the scope of the 2021 ASIC review of life insurance
advice”, I would go further and suggest there is more like a lack of transparency. I also fear that the AFA and the FPA are
going in too soft… What we, as a
collective “Industry” (I’m sorry Profession) should be doing, is challenging
the very ASIC Report that is responsible for all the ridiculous changes we are being
told to accept. Report 413 was a farce…the
report itself even supports this statement by stating the data collected was
targeted. Even worse, not only were
these files targeted but ASIC states in the report that only 201 files were collected
for investigation. Now let me just say…are
there not over 20,000 Advisers? So how
is it even feasible that such a small targeted sample size, which was provided
to ASIC by the FSC, be the basis of such sweeping an ridiculous Risk industry legislation
called LIF. Thanks FSC, you will never
have my trust again… So on January 1
2018 we saw the introduction of the 2 year claw-back and 80/20 comms. 1 January 2019 the commissions went to 70/20
and we all know what is coming on the 1 January 2020…60/20…yet compliance has
increase 100 fold; BID incorporates Product Research, Like for Like and then alternative
product research and why the alternative products don’t suit the client’s needs
and objectives, is great for when there is a product being replaced or a new product
being implemented, but when it is simply a case of altering an existing product
where there is no new commissions (in fact 99% of the time there will be a
reduction is trailing commissions) then it just doesn’t make sense to have to
conduct 10+ hours of work to lose money.
I’m sure this is an unintended consequence but compliance managers and
ASIC don’t care…read about ASIC 515 and see how you are going. There needs to be a balance but the scary
thing is that most of what I have just described is not on the AFA FPA’s
agenda.
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