Persecution of financial advisers must stop

SYDNEY: 18 June 2021 – Following unfair criticism levelled at financial advisers in the Senate yesterday, the Association of Financial Advisers (AFA) is calling for an end to the persecution of the financial advice sector.

AFA Acting CEO, Phil Anderson said, “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 come after debate on the Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020 yesterday. 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’.

Mr Anderson said, “The vast majority of financial advisers always work in the best interests of their clients. The entire profession should not be judged based on what a very small minority have done in the past. Other professions are not judged because of what their worst do.”

Mr Anderson also argued that the reference to what the Hayne Royal Commission exposed is also flawed.

“The Hayne Royal Commission hearings looked at the conduct of 10 individual financial advisers,” he said. “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 ten-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. It is important to note that complaints about financial advice make up only 1.4% of complaints received by the Australian Financial Complaints Authority.”

Mr Anderson also stressed 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. Financial advisers play a critical role in Australian society.

“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.”

Mr Anderson said the time has come to stop the persecution of financial advisers and to recognise the important and vital role that they play.

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 everyday Australians. The AFA believes that the attacks in Parliament, by activist consumer groups and in the media are one important factor in this decline.

“Is the decline in adviser numbers really in the best interests of Australians, who need help to balance their budgets, invest their savings, save for retirement or protect their family in the event of an insurance event?”

Mr Anderson said 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,” he said. “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.”

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.”

Other recent research also 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,” Mr Anderson said. “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.”

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.”AFA Acting CEO, Phil Anderson is available for interview.

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About the AFA

The Association of Financial Advisers Limited (AFA)  has been the authentic voice on the value of financial advice for over 70 years. Today, the AFA is a vibrant, innovative association, where the underlying driver of policy is the belief that great advice transforms lives. To this end the AFA is striving to achieve the vision of Great Advice for More Australians. The AFA’s ongoing relevance as a professional association is derived from its success in engaging with the major stakeholders in financial advice including advisers, consumers, licensees, product and service providers, and the regulator and government. Culturally the AFA believes in the value of collaboration to create powerful outcomes and this drives how we achieve influence and work towards our vision.