He says if regulation is forced on the sector, like it has in the AFA space, it would “decimate” insurance advice.

It is up to advisers, insurance companies and dealer groups to sort regulation before it is forced on the sector, he says.

The Financial Markets Authority has already said it plans to look at the RFA sector more closely this year. Gannon reckons the sector has 24 months to sort itself out and show that it can regulate itself.

Gannon says issues which need to be addressed include; bad advice, “churning for the wrong reason”, and fraud.

Gannon’s view is that self-regulation should be done primarily by the insurance companies. Dealer groups have a role to play, he says, however the companies have the main responsibility as they are ones who have agency agreements with advisers.

He would like to see a system where companies issue points for continuing education. This would require advisers to achieve a minimum number of points each year to maintain their dealer agreements.

Gannon says insurance companies should be able to work together to stop bad advisers from operating.

There have been instances where a company has terminated an agreement with an adviser over bad practices, only to see another company continue to allow that adviser to keep operating.

Gannon doesn’t think there needs to be a separate disciplinary body for registered financial advisers. Rather the life companies can take action. The best would be to end their relationship with bad advisers.

“I don’t think there’s a need to regulate the RFA space if collectively everyone does the right thing,” he says.