FAAA

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.

The life insurance advice sector has been battling a host of issues, including an ill-fitting education program, remuneration uncertainty and product design flaws, for some time. Is it in a death spiral, or is there a path to sustainability for this crucial arm of the advice industry?

The government’s position on what to do with the Safe Harbour Steps is no longer clear, but the chances of seeing it supplanted by the existing Code of Ethics are slim according to the FAAA’s policy chief Phil Anderson.

The potential for artificial intelligence to aid the delivery of financial advice is being recognised globally, and should lead to a “redefinition” of the sector according to commentators.

Even when thousands more advisers left the industry in 2022, bringing the cohort down from 28,000 in 2018 to a total of around 17,000, there was still no shortage according to the government’s own skills commission.

Of the 8,946 practitioner advisers who belonged to either industry group before their April merger, 8,093 have renewed their membership with the merged entity. The FAAA was “very pleased” with the 90 per cent renewal rate, its CEO said, urging stragglers to renew before a grace period ends next month.

The minister was peppered with questions about phases 1 and 2 of the the government’s advice review response, as well as specialist accreditation and data access during a series of events in the sunshine state.

The controversial, long-delayed scheme doesn’t protect consumers from high profile managed investment scheme failures like Sterling and Timbercorp, FAAA CEO Sarah Abood said, and could end up adding another layer of unfair fees at the feet of advisers.

Back in 2019, then-FPA CEO Dante De Gori and Tangelo Advice Consulting’s Conrad Travers engaged the ATO to see if it would be open to updating guidance on the tax deductibility of upfront advice fees. By the middle of this year, we should see the outcome.