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Under attack from the inside

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By Reporter
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3 minute read

I received an interesting call last week from a reader.

Under the guise of informing me about his likes and dislikes from the latest edition of this magazine, the caller went on to suggest I consider toning down the coverage of the federal government's proposed Future of Financial Advice (FFA) reforms.

The reason for such a suggestion? It's an election year, you know.

Of course, everyone is entitled to their opinion, and while the identity of the caller is not important, the suggestion he made did get me thinking.

For one, is this bloke right? Could the proposed FFA reforms be blown out of the water if Kev loses the election to Australia's answer to the political triathlete and budgie smuggler?

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And if this happens, where will that leave Australia's financial services industry?

It's no secret the changes presented by the FFA and, to a lesser extent, the FPA last year have not been entirely welcomed by some factions of the industry.

Those at last year's FPA conference would remember opposition finance spokesman Joe Hockey apologising to then chief executive Jo-Anne Bloch before announcing the coalition government would be blocking any ban on commissions.

However, beyond adviser commission payments, the new focus on volume bonuses, rebates and opt-in rules have many in the industry wishing for an early election call.

Yet perhaps what many are missing is that whether or not Australia gains a new leader for 2011, the industry will still be hamstrung by the same issues - among them that many Australians still do not have access to affordable financial advice.

Is it perhaps possible we've become lost in the small details rather than taken a step back to see how changes or no changes will affect the client?

I understand that for many independent groups the FFA reforms could in fact spell the end of their independence, if not their businesses, with commissions and rebates an essential part of their revenue streams.

Though what is it the coalition government has actually promised you?

For those out there, is it fair to say that pushing against the FFA tide may in fact create more of a concern?

As the adage says, never turn your back on the ocean.