‘Bitterly disappointing’ Jones era leaves AIOFP backing Libs

As the election draws closer, stakeholders nationwide are ramping up their advocacy efforts in attempts to influence votes, and advice is no exception.

In a letter to members, the Association of Independently Owned Financial Professionals (AIOFP) has made its clearest cut statement yet, throwing its support behind the Coalition and shadow financial services minister Luke Howarth.

It’s a stark contrast to the scene just three years ago before the previous federal election, which saw the AIOFP back Labor and Stephen Jones as a much-needed replacement for the former government.

The Financial Services Minister sought to remind advisers of just how bad the Coalition had been for advice when he announced education reforms last week, saying the “advice industry was abandoned and decimated by the former Coalition government, as the number of advisers fell from 28,000 in January 2019 to less than 16,000”.

While many within advice would agree with Jones’ sentiment, that he has almost universally lost support from the profession is indicative of the lack of action during his three years as minister.

“There is no sugar coating the last 3 years under Minister Jones, it has been bitterly disappointing except for the 10-year rule legislation,” AIOFP executive director Peter Johnston said.

“The minister’s two fundamental mistakes were allowing his office to be captured by the Treasury bureaucrats as his key staff from the outset and giving too much respect to the QAR process by allowing [Michelle] Levy to complete the final report.

“We think QAR was half right and the rest flawed, it literally wasted three years of debate and pontification with further risk compliance initiated by the minister, with the ridiculous CSLR developments, the ‘hot mess’ just got hotter and out of control.”

With the minister announcing he would retire from politics and not contest the next election – something Johnston speculated could be because he “was informed his future role was on the back bench” – it is unclear who would take his place if Labor was returned to government.

Regardless of who would step into the portfolio, Johnston said the minister’s office confirmed it would not commit to the AIOFP’s “demands” for eliminating consent forms, returning risk advice to pre-LIF conditions, removing Dixon from CSLR and holding product manufacturers accountable for their own product failure, and allowing adviser professional judgement when constructing a financial plan.

“Great credit however should go to the Liberal Party for acknowledging that they got it wrong with our industry during the 2014 – 2022 period and are prepared to undo the pain which they inflicted,” he added.

“Considering our members voted unanimously in favour of shadow [minister] Howarth’s presentation at our Canberra conference over Minister Jones’ address, the AIOFP has no choice but to recommend our members and the wider advice community to politically support the Coalition government at the upcoming federal election.

“It is time to demonstrate the political power of Advisers and their clients to Canberra.”

According to Johnston, a minority government would be “disastrous” for the advice community, as the likely result would be reliance on the Greens or Teal independents.

“The left-wing tendencies of both groups will be a threat to undoing the compliance ‘mess’ and the risk commission issue,” he said.

“It should be noted that a recent analysis of voting patterns over the past three years showed that the Teals all voted with the Greens on at least 75 per cent and some over 90 per cent of the time. These small opportunist groups have no choice but to be very selfish by nature, they will literally do anything to be politically relevant.”

Johnston also reiterated the AIOFP’s calls for advisers to push against the Compensation Scheme of Last Resort’s (CSLR) cost blowout and inform clients directly about the “frightening future liabilities” advisers face.

“A viable strategy can be to tell them who NOT TO VOTE FOR as opposed to the alternative. Putting the least desired candidate last on the ballot form will be effective,” he said.

“As previously disclosed, our political strategy will involve supporting marginal seat and Teal-affected Liberal seat candidates with full disclosure on activity at the AIOFP AGM and approved by the AIOFP board.”

The AIOFP has not been alone in pursuing a marginal seat strategy ahead of the election, with Financial Advice Association Australia (FAAA) chief executive Sarah Abood previously noting the upcoming federal election is “looming large” and the body is focusing on refining its strategy.

According to Abood, the FAAA is looking into how it wants to engage with not only both major parties, but “critically” the crossbench MPs around “policies in our area, and the really critical things that our profession needs to see in order to better help consumers”.

“We need a real focus, not just on the Coalition and Labor, but of course the Teals, the Greens, and independents that will have most likely a very big impact on what policies the next Parliament is able to implement.”