An industry group has lashed out at the Association of Financial Advisers and the Financial Planning Association of Australia, labelling them conflicted and driven by self-interest.
The United Financial Advisers Association (formerly known as the Life Insurance Consumer Group) has attacked the key financial advice bodies in a scathing open letter detailing the concerns raised by advisers at its recent inaugural conference.
The UFAA said the top issue raised by advisers was that the AFA and the FPA failed to represent members' interests, despite being paid to do so.
"The industry associations have done nothing for the fees advisers have been paying; completely ineffective in changing FSR, FOFA, industry funds, MySuper, TASA, banks' vertical integration and product flogging, LIF, FASEA, dealer fees, PI costs and a host of other issues have been left unchallenged, including the very flawed Royal Commission recommendations," the group said.
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It added that little is being done to support financial advisers at risk of losing their businesses due to changes in remuneration.
Instead, the UFAA claims the associations have abandoned adviser advocacy "and set themselves up as education providers, charging advisers thousands more dollars for FASEA courses" as well as "Code of Conduct police to prosecute advisers rather than support or defend them".
"Advisers feel the FPA and AFA have achieved nothing, are conflicted and simply rollover and bow to whatever the Financial Services Council dictates. Advisers' livelihoods are on the line and no one is representing advisers," the UFAA said.
The group claims the two associations have raked in money and paid themselves millions of dollars, and that both were complicit in implementing reforms detrimental to the industry and consumers.
Despite this, financial information the UFAA claims comes from the association's annual report, shows the AFA had to sell its premises in order to stay solvent after making a loss in 2017.
Salaries of the chief executives and association staff are paid out of members' money and are increasing while advisers face devastating losses of income, the UFAA said.
The figures provided by the UFAA claim the FPA has more than $16.5 million in cash and term deposits, while the AFA has $1.7 million.
"Members have to question what they have been paying their fees for," the UFAA said.
"Neither organisation appears to have a fighting fund for advisers."
Comparing the efforts of the AFA and the FPA in battling changes to remuneration structures to that of the mortgage broking industry, the UFAA said: "Within only a couple of months, the government not only reinstated broker commissions, but these commissions might end up being at a higher level than previously."
"In stark contrast to the mortgage industry, the lack of will, lack of action and lack of achievement for their members by the AFA and FPA is nothing short of shameful."
In a statement to Financial Standard, AFA chief executive Phil Kewin labelled the UFAA's claims as unhelpful, false and misleading.
"We are disappointed that in the current environment there are entities that have chosen to take such a divisive and unhelpful approach in communications that include a number of false, inaccurate and misleading statements designed to cause advisers further concern," he said.
"The AFA has always and will continue to represent the concerns of its members and their clients to government and the regulators, as evidenced by the strong work we have done on the policy and regulatory front."
The UFAA also alleged lack of advocacy is a key reason for the adviser exodus already seen this year. Rainmaker analysis of the ASIC Financial Adviser Register shows there is now 25,522 active advisers in Australia as of today. At its peak, in January this year, there were 28,863.
"The advice landscape is experiencing an unprecedented period of upheaval, so now more than ever we cannot afford to be divided," Kewin said.
"We are also very aware that many members of the advice community are finding the current environment extremely challenging and we are and will continue to advocate on their behalf and provide them with our support."
The FPA was also approached for comment.
The UFAA is chaired by Charles Alexander Financial Services principal Alex Vagliviello, with member representatives including Consilium Advice authorised representative Michael O'Dea, Abacus Finance and Property chief executive Kellie Lam, and Finsure Finance and Insurance's Paul Martin.