An Australian financial adviser has written to the new government with suggestions on how to balance out the “damage” done to the financial services industry by the Labor government.
Peter Corrie has become so disgruntled with the state of the financial services industry that he has taken it upon himself to suggest improvements to Treasurer Joe Hockey.
Australia’s population could support another 10,000 financial advisors but reforms imposed to protect the consumer have had a negative effect on a shrinking industry, says Corrie.
“As the number of advisers diminishes, the country will suffer from under-insurance, less wealth accumulation and greater numbers on welfare, all of which is counter to Liberal principles and individual advancement.”
Top of the list of suggested changes is to make commission on superannuation and investment products the consumer’s choice, Corrie says.
“Jobs have been lost and there are many more retrenchments to come. It is difficult to evaluate future job losses due to fee for service and subsequent lower incomes.”
Corrie also believes conflicted remuneration is a socialist and contradictory concept which needs to be replaced with another, such as “competitive remuneration”. Leaving things as they are restricts choice and competition and reduces incentive by controlling prices and incomes, he says.
Other suggestions include reinstating group life commission, banning ASIC’s controversial shadow shopping practice, abolishing the time-consuming opt in process, and opening up the My Super scheme with more advisor involvement, competition and choice.
“Labor’s regressive over-regulation has not only been expensive to implement, but has resulted in unnecessary complexity, restrictions, penalties and other problems,” Corrie says.
The suggestions were also sent to the AFA, FPA and other interested parties.
AFA president Michael Nowak responded to Corrie to congratulate him on being pro-active, says an AFA spokeswoman. She says the AFA are working with the government to address these issues.
“The AFA have discussed the issues raised on behalf of all members with the new Government, and in addition had Arthur Sinodinos speak on the industry issues at the AFA National Conference last month, where he did outline the Coalitions plan.”