While Synchron Director Don Trapnell says his company supports any moves to reduce the cost of advice and relieve the compliance burden, as outlined in an FSC White Paper on Financial Advice, he says advisers are questioning why they should trust the FSC.
A statement from Trapnell, responding to the launch of the FSC’s White Paper, says the company would “…obviously support moves by any industry body, association, or group of advisers that would reduce the cost of advice for consumers, relieve the compliance burden on financial advisers and simplify the industry’s regulatory framework.”
Trapnell says many of the FSC’s recommendations made sense – including calls to abolish the Safe Harbour steps of the Best Interests Duty; to trade Statements of Advice for consumer-focused ‘Letters of Advice’; to break the nexus between financial product and advice; and to afford greater recognition of prior learning (see: Landmark White Paper Blueprint…).
However, he says, “…and this is perhaps more of a problem than the FSC is willing to recognise, the question on the lips of many risk advisers is – why should we trust the FSC?”
Trapnell says risk advisers have neither forgiven nor forgotten the Life Insurance Framework, which he says dramatically and negatively impacted their businesses, and holds the FSC largely responsible for it:
…We still believe LIF was predicated on a lie, a lie that a culture of churn existed amongst advisers…
“We still believe LIF was predicated on a lie, a lie that a culture of churn existed amongst advisers when there was scant evidence of it,” he says.
He continues: “It was championed by the FSC whose members, to this day, are primarily fund managers, superannuation funds and life insurers. Advisers are right to question the FSC’s motives.”
Trapnell also expressed disappointment that the White Paper did not recognise the need to separate risk advisers from financial planners, especially in relation to education and training.
He noted that specialist risk advisers provide different services to financial planners. “It doesn’t make sense for them to hold the same qualifications or have to commit to the same educational program.”
Trapnell added that the Shadow Minister for Financial Services and Superannuation, Stephen Jones, MP had recently recognised this point.
Synchron says that when speaking at the AFA’s Evolve Conference last month, Jones said FASEA should have recognised that not all advisers need to know every part of the qualification.
So the AFA & FPA are selling us out yet again.
The LIF reforms were perpetrated on a LIE, which the FSC supported, and then the FPA & AFA told their members that the reforms will be good for the industry. The FSC don’t want Financial Advisers dealing with the consumers, they want the consumers to deal direct with their “Call Centres” and the “White Paper” is just another “CON JOB”. The Hayne Royal Commission put the knife in further and yet again, the FSC, FPA & AFA supported the “reforms” from that hatchet job. FASEA has been a joke from day one, and meanwhile Advisers are leaving in droves. The numbers will be below 15,000 by the end of 2021 and probably as low as 5,000 in 2026 when the next phase of the education requirements kick in. [ and before you have a go at me, I have passed the FASEA exam and half way through the Grad Dip so I will be one of the remaining advisers ].
Insurance new business is plummeting down over 200% since LIF reforms began [ is that not telling you something ], and now the insurance companies are starting to feel the pain with many reducing their staffing levels which then effects their service levels, so the downward spiral continues.
The new FDS rules are an overkill, with most clients wondering why are they having to sign endless reams of paper which all tell them the same thing. Yes I agree that clients need to know what they are being charged and what services they are receiving for the fees that they pay, but one for the Licensee, one for the platform and one for the Investment manager is a joke, and then to be told that they have to sign the same thing every year on the same date, they are just bewildered by the duplication and overkill.
Well done Don Trapnell [Synchron] and Peter Johnston [AIOFP] for speaking out and all advisers need to add their name to the petition that Peter has arranged, if we don’t then the government [ with the help of the FSC, AFA & FPA ] will continue to shaft us.
Well said Don. There is no doubt you have the support of so many advisers, especially in regard to the level of trust (or distrust), advisers have toward the FSC. After all, it was the FSC’s Mr Trowbridge who on two occasions, proposed changes to the way risk specialists should be paid, and both proposals have been rejected by the advice community. Does anyone know if Don’s comments have been or will be passed on to the FSC?
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