The banks have left the industry, bad actors have been punished and numerous reforms have been brought in to lift standards, but at a time when adviser mental health is so low, politicians and media members have continued to paint advisers in a poor manner.
Last month, Labor opposed the bill to increase self-managed super fund (SMSF) members from four to six.
In doing so, Labor Senator Jenny McAllister, said: “That’s at the heart of our concerns about this bill, because the risk is 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.
“There are inadequate protections for consumers, and this bill further exposes people to these risks.”
However, data confirmed at the end of the financial year by the Australian Financial Complaints Authority (AFCA) showed adviser-related complaints made up only around 1% of all complaints.
Labor’s attacks come despite an election around the corner and after a surprise loss in the 2019 election which saw its policies over franking credits and negative gearing put under the microscope.
Eugene Ardino, Lifespan chief executive, said the incident with Senator McAllister demonstrated some politicians still like to use the advice community as an avenue to hurl unjustified abuse for political gain.
“Then you wonder why advisers are leaving in droves, suffering from obscenely high rates of mental illness, as well as those who remain taking a conservative view of rules, raising fees to cover the costs of rocketing compliance requirements and being highly selective about the clients they choose to work with,” Ardino said.
Phil Anderson, Association of Financial Advisers (AFA) acting chief executive, said this had been going on for a long period of time, but it was difficult to push back on it during the Royal Commission.
“But that’s now three years ago and when you think about the hearings that went on in April 2018, it wasn’t representative of the entire adviser population,” Anderson said.
“There’s 10 individuals who were the focus of attention during those hearings – that’s not a basis to characterise an entire profession.”
Asked to reflect on those comments, Senator McAllister’s office said they felt it had been taken out of context.
In a statement to Money Management Senator McAllister said: “Labor wants to ensure that all Australians have access to good financial advice. We’re on the side of financial advisers who want a better advice industry.
“The vast majority of financial advisers want to do the best for their clients. Labor wants to ensure those advisers can keep working on their clients’ behalf. We’ll advocate for reforms that do just that.”
Anderson welcomed that statement and said it was a fair recognition of how they wanted to work constructively with the adviser profession.
“This wasn’t the extreme example, it was just another example of what we’ve seen and it had become seemingly the way of dealing with things, particularly any legislative reform in the financial services space,” Anderson said.
“If someone disagreed with it, then the easy call-out was to say this would benefit dodgy advisers, so it had become too easy in a political context to respond that way so that’s why we had to call it out.”
Dante De Gori, Financial Planning Association of Australia (FPA) chief executive, said financial planners had a statutory obligation in law to always work in the best interests of their clients and the entire profession should not be judged based on what a very small minority who had failed in their duty.
“It is time we recognise that any link to the misconduct of financial planners revealed during the financial services royal commission was not representative of the wider financial planning profession,”
De Gori said.
The Coalition Government had been in power since Tony Abbott won the 2013 election and it owned all the reforms that had since been put in place.
Ardino said the Coalition Government would say they supported the accessibility of advice to average Australians but had not offered any substantive action or legislative change.
“I for one look forward hearing less about how the Government wants to make advice more accessible and seeing initiatives and changes that actually make it more accessible,” Ardino said.
“No doubt that the perceptions and understanding of the financial advice sector of both sides of politics need work and this is a great example of this.”
Despite the unpopularity of many of these reforms – like the Financial Adviser Standards and Ethics Authority, the code of ethics, and ongoing fee requirements – Labor had not presented an alternative.