Why financial planners need friends in high places
If the financial planning industry has learnt one lesson from the FOFA process, it is the vital importance of political activism, writes Mike Taylor.
In the wash-up of the Future of Financial Advice (FOFA) processes, the Association of Financial Advisers (AFA) is quite right to flag its intention to remain politically active right up to and including the next Federal Election.
If one particular lesson ought to have been learned by the financial planning industry over the past five years, it is that political lobbying matters, particularly when you already hold the ear of an incumbent Government.
Indeed, the major financial planning organisations could do worse than analyse the tactics adopted by the Industry Super Network (ISN) and the manner in which that organisation parlayed its influence with the Government to move beyond being a ‘bit player’ to become a ‘stakeholder’ in the FOFA process.
The degree to which FOFA has represented a success story for the ISN needs to be measured against the degree to which it ought to have ever really been a player in the game.
It is, after all, only a lobby group formed by a group of industry superannuation funds which, notwithstanding the billions of dollars they hold in funds under management, are only small players in terms of delivering financial advice.
The success of the ISN was owed to the entrée it was allowed to the highest levels of government and to the manner in which other stakeholders in the financial services industry allowed the ISN an unquestioned voice at the bargaining table.
It was noted from time to time through the FOFA process that the not-for-profit sector had been granted a multiplicity of voices through the likes of the ISN, the Australian Institute of Superannuation Trustees (AIST), and even through groupings formed by the ISN, AIST and consumer group Choice.
The shape and texture of the FOFA legislation should therefore be measured against the influence of the various stakeholders; and in many respects the financial planning industry should congratulate itself on the manner in which it ultimately ensured some very necessary concessions.
It is political reality in Australia that the major political parties tend to be influenced by particular groups.
The Australian Labor Party grew out of the trade union movement and its actions tend to reflect those origins. Similarly, the Coalition tends to reflect the views of business and industry.
Rarely, however, have the traditional linkages been so influential as during the FOFA debate.
With this in mind, and with many financial planners still concerned about the impact of the FOFA legislation, it makes good sense for groups such as the AFA to continue their political activism into the future.
Recommended for you
Donald Trump’s presidency has already begun reshaping the corporate and political landscape in the US, with executive orders rolling back diversity, equity, and inclusion (DEI) initiatives and clean energy efforts.
In this episode of Relative Return Unplugged, hosts Maja Garaca Djurdjevic and Keith Ford are joined by AMP chief economist Shane Oliver to take a look at what can be learned from 2024 as attention turns to what markets will do in the new year.
Join us for a special episode of Relative Return Unplugged as hosts Maja Garaca Djurdjevic and Keith Ford are joined by shadow financial services minister Luke Howarth to discuss the Coalition’s goals for financial advice.
In this special episode of Relative Return Unplugged, we are sharing a discussion between Momentum Media’s Steve Kuper, Major General (Ret’d) Marcus Thompson and AMP chief economist Shane Oliver on the latest economic data and what it means for Australia’s economy and national security.
