Advice industry can’t unite until ‘ridiculous’ number of associations is cut down

The new Albanese government is expected to address key issues in the advice sector and work with the sector. However, Peter Johnston, executive director of the Association of Independently Owned Financial Professional (AIOFP), said the current number of associations that exist will make that very hard.

On a new episode of the ifa Show podcast, Mr Johnston said there is “no doubt” the 13 associations that are currently active in the industry is too many.

“There's 13 associations, it is ridiculous. Now, if you compare that to the mortgage brokering industry, there's two. They both got on and they got it fixed.

“Canberra sits back and says, ‘[the advice industry] are just a rabble.’

“So it's got to be rationalised. We go back about four years ago, there was 30,000 member advisers back then. Now there's 17,000, there's still 13 associations. Something’s got to give.”

Mr Johnston predicted that some will eventually fold or amalgamate with others.

New financial services minister Stephen Jones has maintained in recent months that he will look to make some changes in the industry, particularly when it comes to compliance and education standards.

Speaking on a recent webinar hosted by Stockbrokers and Investment Advisers Association (SIAA), Mr Jones doubled down on his earlier commitment to fix the “hot mess” that is the advice industry by introducing an ‘experience pathway’.

“We want to put in place a sensible, efficient recognition of prior learning arrangement so that if you’ve been doing the job for 10 years, you can continue to be a licensed adviser provided you haven’t got any black marks,” Mr Jones said.

He assured that if appointed, Labor “should be able to” enact the experience pathway “pretty quickly”.

On the same episode of the podcast, Mr Johnston challenged the incoming government to urgently address compliance concerns, saying “minimum 50 per cent” of the reforms introduced over the last few years should be axed.

He believes that the industry will best be able to work alongside government and enact positive change if it can be condensed and come together.

“So all we say to all the advisers out there, look at the association you just blindly signed up for the last 20 years,” Mr Johnston said.

“Look at actually who their priority is and what they're actually delivering. And then we hope that there'll be two or three associations left to ask people go through that exercise because 13 is just too many.”

Listen to the full podcast with Mr Johnston here.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.