Following “unfair criticism” levelled at financial advisers in the Australian Senate last week, the AFA is calling for an end to the persecution of the financial advice sector.
AFA Acting CEO, Phil Anderson says in a statement that the “…persistent, ongoing vilification of financial advisers, that we have seen year after year in the Federal Parliament, and in the media, is totally unjust and unreasonable. It borders on abuse and must stop.”
His comments follow debate on the Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020 last week.
The AFA says that ALP Senator Jenny McAllister made the statement that, ‘the people who will benefit most from these arrangements are financial advisers giving shonky advice – the kind of advice we’ve seen again and again and again, the kind of advice exposed in the Hayne Royal Commission’.
But Anderson says the vast majority of financial advisers always work in the best interests of their clients and that the entire profession should not be judged based on what a very small minority has done in the past.
“Other professions are not judged because of what their worst do.”
Anderson also argues that the reference to what the Hayne Royal Commission exposed is also flawed, noting the Hayne Royal Commission hearings looked at the conduct of 10 individual financial advisers.
“This is a tiny fraction of the adviser population. Importantly, the Royal Commission had access to information on misconduct from numerous different organisations over a 10-year period. It is hardly surprising that they revealed cases of serious misconduct during the hearings, however it is totally unreasonable and unfair to suggest in any way that this was widespread.”
…complaints about financial advice make up only 1.4 percent of complaints received by the Australian Financial Complaints Authority…
He adds that it was important to note that complaints about financial advice make up only 1.4% of complaints received by the Australian Financial Complaints Authority.”
Anderson also stresses that the Hayne Royal Commission was not tasked with looking at quality financial advice and successful client outcomes, therefore did not hear of all the great work financial advisers do.
“The Hayne Royal Commission predominantly focused on the conduct of large institutions. It is unfair to slight small business financial advisers based on the cases against large institutions.”
Anderson says the time has come to stop the persecution of financial advisers and to recognise the important and vital role that they play.
The statement also notes that the number of financial advisers in Australia has fallen by more than 30% since the Hayne Royal Commission, reducing access and affordability of financial advice for Australians.
The AFA believes that the attacks in Parliament, by activist consumer groups and in the media are one important factor in this decline.
The most heavily regulated sector in Australia
Anderson says financial advice is the most heavily regulated sector in Australia and Senator McAllister’s assertion of inadequate protections for consumers could not be further from the truth.
“There has already been an avalanche of never-ending reforms. Additional measures to supposedly increase consumer protections will only increase the cost of financial advice and deliver little or no benefit to the many Australians who value their financial adviser relationship.”
The AFA says that recent research, completed by CoreData shows that the clients of financial advisers highly value the services they receive from their advisers and highly trust them.
“It is these existing clients of financial advisers who the Parliament should be listening to,” Anderson says.
The association also notes that other recent research reveals that advisers are highly stressed because of what has been done to them and the mountain of change that they are going through.
“Financial advisers are humans, they have families and friends. They have emotions,” Anderson says. “For too long they have been forced to feel uncomfortable talking publicly about what they do. This is not right. No professional should be made to feel this way, and particularly not by elected members of their own Parliament.”
The statement concludes that as financial advice moves into a new era of enhanced professionalism, the AFA is calling on all stakeholders to enable financial advice “…to make a new start, one free from constant criticism and scepticism. One where they can focus on looking after their clients and feel confident they will be respected for the great outcomes they deliver.”
“The time has come. Enough is Enough. We call on all fair minded Australians to make this happen,” Anderson says.