The regulators need to hear from existing clients rather than those who speak on behalf of those who do not receive advice on whether they see value in financial advice reforms, according to the Association of Financial Advisers (AFA).
Speaking at a Parliamentary hearing, the AFA said the “missing voice” was from existing clients and they provided insight into the ongoing advice relationship and were needed to be heard to balance out discussions regarding reforms that focused on the “bad news”.
AFA acting chief executive, Phil Anderson, said: “We had a conversation before with [Labor’s] Dr [Andrew] Leigh about commissions for life insurance. Clients are choosing to pay commissions rather than fees for life insurance yet the activist consumer groups are demanding the end of commissions.
“We also see it in the very high levels of criticism of financial advisers about the way they run their businesses. Those complaints are not coming from existing advisers. In fact, Michael spoke earlier on about the number of complaints against financial advisers that end up at AFCA [Australian Financial Complaints Authority]. It was 900 in the last 12 months. They are not expressing the same level of concern through those processes that the activist consumer groups make.
“So, we are emphasising the fact that there needs to be a better way to hear from existing clients, not those people who tend to speak more on behalf of those who don't get advice.
“That feedback will highlight whether they see value in some of the reforms, the additional bureaucracy and complexity that have been put into the process, whether they are happy to be paying more for those protections than they did before.
“So, we think it's really important that existing clients get a voice in the debates that are going on at the moment.”