AIOFP calls FSC’s white paper ‘offensive’ and ‘politically motivated’

The Association of Independently Owned Financial Professionals (AIOFP) has taken aim at the Financial Services Council’s (FSC) plan to reform the advice sector, terming the body’s recent white paper as “technically incorrect”, “offensive” and “politically motivated”.

In an open letter addressed to the FSC’s directors and management, the AIOFP’s executive director, Peter Johnston, made his “candid views” very clear, firing shots at the FSC’s assessment of itself as the industry’s “peak body”.

The four-page letter begins with Mr Johnston arguing against the FSC’s “financial advice fraternity” standing.  

“The FSC origins via the previous entity Investment & Financial Services Association [IFSA] was principally a lobby group funded by the banks to achieve favourable political outcomes for the Liberal Party,” Mr Johnston wrote.  

“We are of the view that hybrid membership associations are no longer wanted in what should be today’s consumer-centric marketplace. Transparency of objectives and best interest intentions for members and consumers should be the way to operate in our view.”

The letter then moves on to relay Mr Johnston’s thoughts on the subject matter — the white paper — and sees him employ words such as “condescending” and “patronising”.

Taking aim at the FSC’s evaluation that recent events have moulded the financial advice industry into a profession, Mr Johnston argued that he did “not consider financially starving and intimidating 9,000 advisers out of the industry over the past three years with draconian measures to be conducive to becoming a ‘profession’”.

“It has been a brutal, deliberate and targeted attack on small business by ‘faceless’ individuals in Treasury and backed up by their political allies,” he continued.

In closing, Mr Johnston accused the FSC of operating in tandem with the federal government to “placate” the advice community before the election.

“We have been reliably informed by some of your members that this document and its issues were NOT initially circulated [despite intimating it was...] among members for comment and it was embargoed in much the same fashion as a media release from a minister,” he said.

“We are of the view that whoever put the recommendations together has never given advice. It seems they have selected past ‘hot topics’ and offered partial and, in some cases, irrelevant solutions, further complicating the detail and increasing costs,” he concluded, reiterating the AIOFP’s lack of trust in the government.