How satisfied are advisers with regulators, government and associations?

According to research firm CoreData’s Future of Advice report, the Association of Independently Owned Financial Professionals (AIOFP) has the highest satisfaction rating among associations, regulators, and the government.

Speaking with ifa, CoreData chief executive Dean Thomas explained that the research surveyed advisers across a range of topics, noting that all advisers were able to provide their opinion of association performance regardless of whether they are a member.

The survey found that 27 per cent of advisers surveyed were satisfied (scoring from 7–10) with the AIOFP, 50 per cent were neutral (4–6), and 23 per cent were dissatisfied (0–3). This averaged out to a score of five out of 10 across all advisers.

The Financial Advice Association Australia (FAAA) also outperformed the regulators and government, with 23 per cent of advisers satisfied with the association, 38 per cent neutral, and 39 per cent dissatisfied. Its overall satisfaction rating was 4.2 out of 10.

While CoreData did not differentiate between membership of associations, it did break the results down into cohorts based on growth ambitions.

“We have three cohorts in the survey. First are those that had strong growth plans, and those are defined as people that basically have documented plans for growth,” Thomas said.

“Then you have a cohort called general growth plan. That cohort of advisers, which makes up the bulk of that about 54 per cent of the survey sample, say, ‘Look, we plan to grow, but we haven’t got the strategy or documented plans for how we get there’.”

The third group of advisers are those looking to simply maintain, rather than grow their firm.

According to Thomas, the satisfaction for the associations varies depending on the adviser cohort, with the AIOFP having greater satisfaction among the maintain group and the FAAA rating better with the strong growth plan cohort.

“The FAAA for businesses with strong growth plans come out on top, it has 29 per cent satisfaction rate, as opposed to the AIOFP, which has a 20 per cent satisfaction rate for Australian plans,” he said.

“When you get to general growth plans and maintain, that number for the FAAA dropped dramatically. So, what that’s really saying to me is … potentially the different parts of advice market are aligning or associating themselves with those different industry bodies.”

Responding to the survey, AIOFP executive director Peter Johnston said the “homogeneous nature of its membership” and not sitting on the “political fence” were key factors.

“History has clearly shown that associations cannot serve more than one master, we have and always will act in the best interests of our adviser members and their clients. We are pleased the wider advice community is now coming to terms and now appreciating our conduct over the years,” Johnston said.

“Our political support is only on a ‘lease basis’, we are not for sale. We will always support political parties who support our members, if that means changing ‘teams’ at some point, then so be it.”

Government and regulators

Unlike the associations, there was essentially no difference in the way these different advice cohorts felt about the government’s performance.

“There are slight variations, but not enough to be able to say, ‘Oh, wow, that group is really happy with what the government bodies are doing’,” Thomas said.

Not only did the government rate just 2.3 out of 10 on average, an overwhelming majority of 71 per cent said they were dissatisfied with the government. Additionally, while 25 per cent were neutral, a mere 5 per cent of advisers surveyed said they were satisfied with the government.

“Look at it this way: ASIC had a dissatisfied rate of 59 per cent, so that was the second highest, but that’s the body that’s regulating the advisers,” Thomas said.

“And then when you consider, they’re probably thinking, ‘Well, they’re doing what they’re told to do, the government is the one that can actually make the changes’, and they’re just not doing enough in the space.

“Look how slow they’ve been with all of the implementation of the recommendations for the Quality of Advice Review. Then when they have gone down that path, it’s a piecemeal and it’s taken a long time, and then they’ve created these additional rules and obligations.”

As Thomas noted, the Australian Securities and Investments Commission (ASIC) did not fare much better than the government, with 8 per cent of advisers satisfied, 33 per cent neutral, and 59 per cent dissatisfied.

The prudential regulator fared better, with 11 per cent of advisers satisfied with the Australian Prudential Regulation Authority (APRA), 50 per cent neutral, and a relatively small 39 per cent expressing dissatisfaction.