Delivery of Quality of Advice review ‘questionable’: AIOFP
The industry is tired of reviews being passed onto third-parties, according to an industry expert, and advice must be separated from product.
In an open letter to Senator Jane Hume, Peter Johnston, executive director of the Association of Independently-Owned Financial Professionals (AIOFP), said the delivery of the Quality of Advice review, which would be led by lawyer Michelle Levy, had been questionable.
The terms of reference for the review were announced last Friday and a report was expected by 16 December, 2022.
Johnston said: “Theoretically the Government has done the sensible thing with seeking an opinion from a third party on the advice industry, but their delivery, motive and process are typically questionable.
“Advice must be separated from product to protect consumers from product failure and the industry is tired of conflicted lawyers with no practical advice experience dictating terms.
“A panel of ASIC, experienced advisers and AFCA [representing consumers] should be formed immediately after the election to sort out the compliance issue, a total duplicated mess primarily caused by lawyers and funded by consumers.”
He indicated four issues which needed to be supported by Senator Hume if she was to gain re-election.
These were:
- Consumers have a choice of a commission and a fee for service option to pay their Adviser, let the Consumer decide. Small business does not need Government overreach dictating commercial terms.
- The 60% risk commission levels needs to be elevated to at least 85/15%, this does not create a conflict.
- The FASEA exam needs to be abolished or comprehensively modified to suit the adviser’s specialty.
- A panel of ASIC, experienced advisers and AFCA sort out the compliance mess immediately after the election, not inexperienced lawyers.
AUTHOR
Laura Dew
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