Advice community needs to capitalise on Canberra ‘blame game’: AIOFP

According to Peter Johnston, the executive director of the Association of Independently Owned Financial Professionals (AIOFP), the “indiscriminate blame game” playing out among Labor and the Coalition is a “sure sign of an approaching re-electoral phase”.

“We currently have this happening with Minister [Stephen] Jones coming under heavy fire from the Liberal Party for the drafting errors of the QAR Tranche 1 proposed legislation and its content,” Johnston said.

On Monday, a joint statement from shadow treasurer Angus Taylor and shadow financial services minister Luke Howarth labelled the first tranche of the government’s legislation an “embarrassing blunder”.

“Financial advisers are today warning that it will add red tape and drive up costs for customers because it requires superannuation trustees to check every piece of advice given to members,” the statement said.

“This is the consequence of a government that is asleep at the wheel.”

Taking things even further, Howarth said “it’s time Stephen Jones steps up or steps aside”.

Johnston noted that while the AIOFP strongly backed the ALP ahead of the 2022 election “for good reason”, the Liberal Party has “recently acknowledged their past mistakes and are willing to work with the advice community in a positive manner”.

“The Liberal Party had purposely targeted the advice community to cull advisers by stealth with vicious legislation to starve and intimidate advisers out of the client relationship and it worked very well. Sitting on the fence was not an option for us,” he said.

“The ALP and Minister Jones started well after attaining office but have disappointed on several fronts in recent times,” Johnston added.

“Minister Jones’ pre-election promise to deliver on the education pathways legislation is the highlight, but his handling of the QAR response and Treasury consultation process has been poor, to say the least. It is quite apparent the Canberra bureaucrats have infiltrated his office in the past and drove these outcomes.”

The next six months to year, he said, is the “time to take advantage of politicians wanting votes and locking in desired legislation to circumvent the bureaucrats’ agenda”.

“Bureaucrats can’t change the law but they can influence policy development and direction in its infantile stages,” Johnston said.

“The role of the Canberra bureaucrats going forward is our greatest threat to achieving what we want as an industry, we must find a path to counteract their influence.

“We are pleased to note however that Minister Jones is currently seeking a new senior adviser, let’s just hope lessons have been learnt and this person is experienced from the market with no bureaucrat history or heavy connections.”

He added that the advice community needs an “ironclad bipartisan agreement” ahead of the election on the abolition of the consent forms, ASIC/CSLR levy terms and returning risk back to pre-LIF conditions.

Otherwise, Johnston said, “it will be another hard three years before this pre-election opportunistic window reopens”.

“The advice community needs to engage their clients with the political discourse and how current policy is directly negatively affecting their financial position and establish a healthy fighting fund to influence outcomes,” he said.

“We need to continually remind politicians that the advisers and their clients represent over 3 million votes, the AIOFP has a plan for both strategies which are currently being executed.”