In a bold move to stave off new professional standards planned for their industry, financial advisers are planning to join forces with the union movement.
The surprise move from a key adviser industry lobby group comes as the financial industry prepares for the potential election of a Labor government which would arrive in power with a new agenda for financial services including cutbacks in negative gearing and capital gains tax allowances.
Against a backdrop of financial advice scandals, the government is planning to launch a new set of professional exams which advisers must pass regardless of past experience or other qualifications.
Proposed by the newly created Financial Adviser Standards and Ethics Authority, the education plans have inflamed tensions across the industry with predictions more than half the financial advisers in Australia will quit or retire.
Now the executive director of the Association of Independently Owned Financial Professionals, Peter Johnston, has come out strongly against the government plans and issued a call to arms.
In a circular to advisers Johnston says: “To achieve our objective we may need to consider dealing with political factions that may not match your past allegiances or loyalties … self-interest should convince you that your career and business is more important than the negative feelings of a particular political party.
We need to broaden our political base by seriously considering joining the left wing Finance Sector Union which has considerable power in the ALP’.
While the AOIFP’s decision highlights weakness in the Coalition government it is also an example of business and industry making plans for a change of government in the months ahead.
“It’s our insurance policy, if Shorten and the ALP get in‘ Johnston told The Australian yesterday.
Ranged against the Johnston and the AIOFP is the FASEA board led by chair Catherine Walter, one of the nation’s best known company directors.
However, FASEA itself has been struggling with the new changes as its inaugural CEO Deen Sanders left unexpectedly earlier this year — a replacement CEO Stephen Glenfield is due to commence in September.
A deadline for the new exam regime is 2024 — under FASEA’s new conditions the minimum educational qualifications an adviser will need is a bachelor’s degree ‘in a related subject’ to financial advice and to later pass a set of so-called bridging exams.
The AIOFP has broadly criticised the entire FASEA plan, branding it as ‘repugnant’. The organisation has called for ‘risk advisers’ in life insurance and aged care advisers to be exempt from the new rules.
The AOIFP say the new exam standards will be ‘grossly unfair’ making related degrees irrelevant and giving no credit to advisers who have been in the industry for decades.
A separate lobby group, the Financial Planners association, has also pushed for a review of the FASEA proposals though the FPA has not recommended the extreme political action voiced by Johnston and his organisation. [The FPA is a bank funded outfit]
The FPA — which is seen as the peak body for the industry — maintains that more than 7000 financial planners around the country have raised concerns that their qualifications will not be good enough under the new regime.
The former CEO OF FASEA, Deen Sanders, who has since joined Deloitte, recently said the deadline for the implementation of the new exams should be extended — Sanders told a conference: ‘Why don’t we give consideration to how long this takes to get the right outcome instead of a rushed outcome.’