Political tide could turn for advice sector in 2020

In a note to members distributed on Tuesday, AIOFP executive director Peter Johnston said with the public growing dissatisfied with the government on a number of issues, including its response to the virus, it was likely that political will could turn in favour of more moderate regulation in the advice sector in months to come.

“There has been a number of significant political events over the past few months that should give the advice community hope that the worst of our poor treatment at the hands of politicians over the past 10 years is coming to an end,” Mr Johnston said.

“It appears the pendulum is starting to swing back to some badly needed middle ground and that the light at the end of the tunnel is intensifying.”

Mr Johnston pointed to recent public comments by MPs on both sides of the aisle indicating an awareness of the impact increasing regulation had had on the advice industry, which could play out as the Coalition geared up for the next federal election.

“For the first time in many years we have politicians publicly acknowledging that the current government and FASEA have gone too far with industry amendments. Shadow minister for financial services Stephen Jones has been vocal on this matter and Liberals Bert van Manen and senator Amanda Stoker have also been highly critical of FASEA’s conduct,” Mr Johnston said.

“The role and influence of the Financial Sector Union is becoming increasingly critical to the ALP political agenda going forward and its support of the advice industry.

“We are now only 12 months away from this government going into re-election mode for the 2022 election and senior ministers know that past colleagues have gone too far with a number of changes.”

Mr Johnston said the government’s current consultation around a compensation scheme of last resort would be a good test of its willingness to listen to industry feedback, while the expiration of current FASEA chair Catherine Walter’s term this year could also be a positive outcome for the industry.

“FASEA is meant to be an independent conflict-free authority acting in the best interests of consumers – instead we have a heavily conflicted oligarchy enforcing conditions onto the industry that are largely impractical and not in the best interests of consumers,” he said.