Planning lobbyists target independents
The independents in the House of Representatives have become the target of lobbying efforts on the part of the financial planning industry.
Industry sources have confirmed to Money Management that representatives from a number of the major financial services institutions have held discussions with key independents Rob Oakshott and Tony Windsor on issues concerning the Future of Financial Advice (FOFA) reforms.
The discussions with the independents have come at the same time as the Financial Planning Association (FPA) has provided its members with a resource kit to enable them to contact individual members of Parliament to press their concerns about the proposed new legislative and regulatory changes.
The contact with the independents in the House of Representatives is seen as critical in circumstances where there is a belief that the arguments of the industry funds, rather than those of the financial planning industry, will prevail when the Greens assume the balance of power in the Senate later this year.
“The House of Representatives is crucial,” one senior source said.
The lobbying efforts have come at the same time as some planners have suggested the FOFA changes have not only affected the valuation of their practices but the degree to which the major banks are willing to finance their operations.
The managing director of independent platform provider Paragem, Ian Knox, said he had seen unequivocal evidence of the impact of a tightening in the financing arrangements for financial planners.
He said that he had been aware of instances where financial planning practices had experienced real challenges related to financing when seeking to change dealer groups, including providing independent proof of earnings.
The Commonwealth Bank confirmed in November that it had changed the criteria around its lending to financial planning practices but a spokesman last week denied there had been any subsequent tightening of those arrangements.
However, there was an acknowledgement that planners need to be more focused on debt serviceability than multiples of earnings.
Knox said that while it was possible that the changes to commission arrangements and other factors had been influential in the changes to lending criteria, it had to be remembered that it was likely to be a number of years before the changes were actually implemented.
“In the meantime, the existing commercial arrangements prevail,” he said.
AUTHOR
Mike Taylor
Recommended for you
BT is to launch a new low-cost “Focus” investment menu for its Panorama platform this October, in partnership with Vanguard, seeking to compete with industry superannuation funds.
Net gains of financial advisers have already doubled since the start of FY25, according to this week’s Padua Wealth Data, with momentum gathering pace far faster than the previous financial year.
National advice firm MiQ Private Wealth has appointed a new chief executive to lead the business through a “transformative era” after penning a partnership deal with AZ NGA earlier this month.
WT Financial’s managing director, Keith Cullen, believes the firm’s Hubco model with Merchant Wealth Partners will be a “repeatable growth model” for the business as it scales its adviser numbers.
