AIOFP calls for advisers to ‘back those that back your profession’

In a letter to members, AIOFP executive director Peter Johnston said the announcement last week that Sequoia director and InterPrac chief executive Garry Crole was funding six months of AIOFP membership of 400 InterPrac advisers was a positive for the profession.

“Advisers are proficient at managing client monetary capital, but managing their own political capital is another skill,” Mr Johnston said.

“The recent 99.5 per cent acceptance of AIOFP membership by the demographically diverse InterPrac adviser cohort is a clear signal that the ‘divide and rule’ tactics employed by the institutions in the 1990s to polarise and politically control the advice community is coming to an end.

“We would have expected around 50 per cent acceptance pre-2019 federal election, 99.5 per cent is a game-changing outcome.”

According to Mr Johnston, the previous state of “war” between the institutionally aligned and the independent advisers “provided the perfect platform for the institutionally aligned associations to prance into Canberra with legislative options while a disparate advice community were in disarray”.

“This environment set the scene for Canberra to conclude that the advice community were a ‘rabble’ and they will seek direction from the institutionally aligned associations,” he said.

“This is precisely how the LIF/FASEA legislation easily passed both Houses in Canberra with the blessing of FSC/FPA/AFA supposedly ‘representing the industry’.

“These anti-adviser outcomes can be largely blamed on advisers not managing their own political capital efficiently. Being a member of any association gives their management and board the imprimatur to use your political capital to justify and back their decisions, whatever they may be. The FPA/AFA were not only taking member fees but spending the members’ political capital (essentially against them) to put LIF/FASEA in place.”

Mr Johnston argued that this should serve as a warning to financial advisers that they should steer clear of associations that “don’t represent your views or objectives”, taking particular aim at the Joint Association Working Group (JAWG).

“The JAWG conglomeration is a classic example,” he said.

“The next 12 months must be used by the advice community to get bipartisan approval for the key issues before the next election – this starts with backing those who back your profession.”

Mr Johnston said that the recently formed Independent Financial Counsel (IFC), comprised of the AIOFP and the Finance Brokers Association Australasia (FBAA), is the answer.

“Naturally, we will argue that the AIOFP board and management has led the way with representing advisers in Canberra, the legislative scoreboard does not lie,” he said.

“We also see the alliance with the FBAA enhancing our influence in Canberra and opening up commercial opportunities for both memberships.”