The Association of Independently Owned Financial Professionals (AIOFP) says it has been recruiting risk specialist advisers and groups from the AFA since the Life Insurance Framework (LIF) compromise was reached.
While AIOFP executive director Peter Johnston has previously said adviser associations should be “homologous”, and that the AFA should stick to life insurance advisers while the AIOFP should focus on the non-aligned sector, Mr Johnston now says the AFA’s deal with the FSC on the LIF has changed the landscape.
“The AFA has proven that it is supporting life insurers and not risk advisers by caving to their demands on hybrids and clawbacks,” Mr Johnston told the AIOFP’s offshore conference in Colombo, Sri Lanka.
Mr Johnston said it became clear in discussions with Minister for Small Business and Assistant Treasurer Kelly O’Dwyer that the government mistakenly believes all advisers back the LIF because of the AFA and FPA’s support for the framework.
“All these [IFAs that are members of the AFA and FPA] are doing is funding the enemy to act against their own interests. Being a member of [these groups] gives them greater leverage to say that they represent the entire industry and not just those aligned to the insurers and institutions,” he said.
The AIOFP said it has signed 49 individual advisers in the past 10 weeks, including a number of risk specialists, and is in advanced discussions with others. Several of these advisers voiced displeasure with the AFA over its role in supporting the LIF.
However, AFA president Deborah Kent has previously commented that the AFA’s involvement in the LIF process prevents a potentially worse outcome for advisers, while CEO Brad Fox described the eventual compromise as a “big win”.
“We could [have] ended up with something like a nil commission [model],” Ms Kent said. “There are still others out there that would rather see us have nothing, or [even] level commissions, which was [recommended] in the FSI report."