The AFA is conducting an investigation into the legality of an email from the LICG, which included a call for an extraordinary general meeting in an effort to halt the LIF reforms.
Earlier this week, AFA member and director of Now Financial Group, Mark Dunsford, announced his plans to call for an EGM to convince the AFA board to withdraw its support for the LIF in its current form.
His email announcement was distributed to AFA members via the LICG.
Following the announcement, AFA president Deborah Kent said the association would conduct an investigation into the legality of the email. She also urged members to reject Mr Dunsford’s push for an EGM.
“At a time when advisers are repeatedly sharing with us that stability and certainty will help them to get on with the job of looking after clients, this action [EGM] is likely to cause exactly the opposite,” she said.
“If we are to be respected as a profession, and for the AFA to be respected as a professional body, then we need to continue to earn that respect through our conduct. An action like this is likely to reduce the AFA’s credibility and effectiveness in representing the interests of AFA members and your clients.”
Ms Kent said Mr Dunsford’s email calls for a change to the AFA constitution and would mean that the association would be forced to support the retention of upfront commissions in excess of 100 per cent.
“The proposed change would be the AFA board would not be able to form any policy position or negotiate any policy position with government [and] other associations or consumer interest groups without calling a general meeting and conducting a member vote,” she said.
“This is a critical time in the profession’s development. AFA members need representation at the decision-makers’ tables. This change to the constitution would reduce, and possibly remove, the AFA’s relevance as a voice.”
In his email, Mr Dunsford argued that the AFA had not represented advisers in the LIF reform process.
“Many AFA members have expressed their concerns to us that the proposed LIF reforms clearly do not provide any benefits to consumers whatsoever and only serve to boost the profits of insurers at the expense of consumers, advisers and their businesses,” Mr Dunsford, who is also a key LICG member, said.
“This shameful situation needs to be called out. If the AFA withdrew its support from the LIF, [politicians] would have reason to reconsider the legislation and, in particular, be able include all the compelling and factual evidence provided from the good work done by the LICG.”