Government liable for ‘deliberate attempt’ to abolish advisers, says AIOFP

The rapid decline of advisers must immediately be addressed, the executive director of the Association of Independently Owned Financial Professionals (AIOFP) said on a recent episode of the ifa Show.

Ahead of his guest appearance at the ifa Future Forum, Peter Johnston talked about some of the most burning issues in advice, including the ongoing FASEA torment.

“The major problem is FASEA,” Mr Johnston said.

“FASEA in theory is the right direction, but unfortunately it hasn’t worked out in practical terms.

“We believe there was an agenda to target advisers to get them out of the industry, because the banks and the other institutions wanted to go directly to consumers.”

Through techniques including “starvation” and “intimidation”, Mr Johnston believes the government is squeezing advisers out of the industry.

“By starvation I mean cutting revenue streams such as grandfathered revenue and also for the risk advisers, dropping the commission down too low where they can’t operate,” Mr Johnston said.  

“From the intimidation point of view, saying to people their degrees and experience ‘well, we’re not counting that, you have to have a degree whether [you’re] 17 or 70’, is just ridiculous.”

To remedy the problem, Mr Johnston and the AIOFP have taken an active role in addressing political parties ahead of next year’s federal election.

“FASEA has to be really looked at after the next election. We think that anyone with 15 or more years of experience shouldn’t have to have a degree because they’ve got sufficient practical knowledge,” Mr Johnston said.

“The government has obviously disbanded FASEA as an entity, which means nothing because the legislation is in place.

“The other one also is the compliance regime, it’s just ridiculous, it’s duplicated. I personally think they know it’s frustrating advisers and driving them out of the industry, which is what they want.”

Join us at the ifa Future Forum, for free, next Wednesday (17 November) to hear Peter Johnston tackle the most burning issues in advice today.