Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
Time to take a stand on punitive financial advice compliance
Dissatisfied with the way in which financial advisers are being treated, the Association of Independently Owned Financial Professionals (AIOFP) has taken a stand, launching a political movement to voice their concerns.
The body says, “the current Coalition government have unfairly targeted financial advisers for their own political purposes. Consumers have become collateral damage by either paying unnecessarily high advice fees or unable to afford advice. This persecution of advisers and consumers must end.”
The AIOFP released a highly charged video and article urging all financial advisers to “put aside any political differences” and to make a stand. It says the government has used specific legislation to deprive advisers of traditional income streams, and has “imposed psychological torment with draconian educational standards that defies conventional and bullied in a duplicated expensive compliance regime that makes little sense.”
The result, it says, are massive fee increases from advisers accommodating government-imposed compliance standards that are passed onto the customer; with the “knock-on effect” of rising mental health issues and deaths of advisers caused by suicide, all due to “deaf Liberal ears in Canberra.”
Emotive campaigning aside, looking at the facts, over the last five years, the annual cost to service a client has risen from $1,500 to $6,000. “The savings of $2,500 a year, or $7,500 over the next three years, is based on the savings for consumers if the duplicated and unnecessary compliance costs are eliminated,” says the AIOFP.
Whether this was a “deliberate pre-meditated attack” by the government to please their “banking supporters” is “up for debate,” in the AIOFP’s view. What is more important however, is how the AIOFP intends to enact change.
The first way is via its highly charged political campaign, which looks to spread the word on why financial adviser fees have escalated. The second is to not accept what has happened, and seek amendments pre-election to the current legislation to make life easier for advisers and consumers.
