Responding to reforms proposed by LIAWG independent chairman John Trowbridge, Mortgage Choice general manager of financial planning Tania Milnes said the recommendations will force risk advisers to reconsider their future in the profession.
“The proposed remuneration structures are likely to drive advisers to vertically aligned channels with new licensees shut out of the industry,” Ms Milnes said.
“It would be very difficult for a new licensee that is not vertically integrated to generate a sufficient return on the start-up investment required to build a robust model,” she said.
Ms Milnes also said with the introduction of a capped remuneration model, advisers will be forced to focus on servicing wealthier clients who can afford to pay a fee for service rather than servicing average Australians.
“If Mr Trowbridge’s specific recommendations relating to adviser remuneration are ratified it would make life insurance more expensive for Australian consumers,” Ms Milnes said.
“The FOFA legislation was first introduced in order to improve the quality and trustworthiness of financial advice and make financial advice easily accessible to all Australians, regardless of their wealth status.”
“If Trowbridge’s remuneration recommendation is ratified it may stop certain Australians, particularly the wealth accumulators, from accessing quality financial advice – thereby directly contravening one of the ideologies behind FOFA,” she said.
Ms Milnes is spot on.
The Trowbridge report is a clear attack on IFA’s and will send the industry hurtling backwards to using only vertically aligned channels. This is clearly contravening FOFA and plays into the plans of the big four banks & industry funds channels. It’s no coincidence that these sections of our industry are always at the table making decisions for the rest of us.
Unfortunately there’s always a clear conflict of interest with those that are supposed to be representing advisers. Too few have too much power and this is the problem.