Tag: FAAA

The research is clear: client loyalty is not accidental. A high-quality experience, backed by consistent messaging, is what keeps clients engaged for decades.

The most expensive mistake in advice right now isn’t buying the wrong technology. It’s feeding good technology bad data.

While the second tranche of DBFO reforms remain stuck in parliamentary mud, an inquiry into the CSLR design and Dixons Advisory scandal is already falling behind.

The industry’s struggle to identify new talent is likely to continue, but the outflow of advisers has slowed considerably. And there are plans to source talent from other corners, according to the FAAA.

AFCA stands by the use of its “But for” methodology to calculate compensation payments, despite the FAAA’s protestations. Clients will get paid what they lost, plus what they would have earned if the advice wasn’t inadequate. Just don’t call it payment for theoretical loss, or opportunity cost.

The industry has little chance of fighting through the legislative backlog and getting immediate wholesale change made to the ill-designed CSLR. There are things the government can do in the interim, said the FAAA, but who’s listening?

The likely advent of a new class of ‘simple’ advice providers will reshape the industry ecosystem. According to FAAA members, there are four key issues that need addressing before this key reform is implemented.

As part of the strategic partnership, Indian CFP aspirants will have a pathway to gain qualifications that meet the Australian regulatory framework. It’s a bold plan, but one that could help shore up adviser numbers according to the FAAA.

The merged association has added a new core driver to its strategic objectives for the next six years, with growing the profession now a top priority. But the inherent challenges, and past failures, are forcing the FAAA to try new ways of getting more advisers on the books. 

It came as a relief instrument rather than the expected guidance note, but ASIC’s move still managed to give advisers the surety they need to legally use the FSG exemption.

The evolving nature of advisers’ client bases, and the work they do for different parts of those, is leading to title creep. But there is little in the way of official guidance on what titles are appropriate.

“It isn’t really a surprise,” FAAA chair David Sharpe said, noting that advisers with CFP next to their name go through “blood, sweat and tears” to attain the designation.

The ATO has dug its heels in, and is firm in its belief that upfront advice should remain classed as capital expenditure. But the FAAA did gain a significant concession around tax (financial) advice provision.

In the Dixon’s inquiry vertical integration will not only be writ large, but it will have thousands of victims’ names attached to it. The practice has run relatively unfettered for years, but that may be about to change.

It’s essential that we learn from the Dixons Advisory scandal, the FAAA chief said, so we can avoid future harm. The association has asked the government to consider a full inquiry into the case, while advisers contemplate the financial toll ahead of them.

While the minister has remained relatively mute on the obvious issues with the CSLR, he will at least allow the association to discuss the scheme’s flaws with Treasury at some point.

There are several aspects to the treatment of the case that don’t add up, the association’s policy lead says, and a transparent public inquiry is more than warranted.

It’s a welcome stopper on the amount advisers will have to fork out, but has no connection to the core issue. The government still fails to recognise the inherent flaws in its CSLR scheme, and the industry is running out of patience.

Even though most of the Dixons Advisory complaints are yet to be submitted, the CSLR has already allocated a $24 million bill to the industry. Good financial advisers will be forced to pay for the nefarious and neglectful acts of bad ones for years to come.

There are several bones of contention that the FAAA, and the industry more broadly, has with the compensation scheme’s settings, despite supporting it in principle. At the heart of it is the government’s repeated willingness to foist retrospective punishment on the good for the sins of the bad.