FPA welcomes regulatory support of its ten point plan
Mark Rantall
The Financial Planning Association of Australia (FPA) has welcomed ASIC’s backing of its 10-point plan, saying it hopes that government policy will follow suit and reflect support.
Mark Rantall, FPA CEO, noted comments made by ASIC commissioner and deputy chair Peter Kell, as reported in yesterday’s media, which called out the FPA’s plan as a positive step forward, particularly noting its commitment to raising industry standards and promoting professionalism.
“We are very pleased to see that ASIC has acknowledged the work we are doing to promote higher professional standards for the financial planning industry as well as working to ensure better advice outcomes for the end consumer.”
“We will continue to work with the government, and industry and regulatory bodies, to ensure that the journey towards professionalism that we started back in 2009, when we banned our members from receiving commission payments on investment and superannuation products, is completed.
“Our ultimate aim is to ensure that the best interest of Australian consumers is continually upheld,” said FPA CEO Mark Rantall.
While ASIC called out its broad approval of the FPA 10 Point Plan, media coverage today called out particular support around a full adviser register and raising minimum education standards for financial planners.
The 10 Point Plan
The FPA seeks to raise the standards of financial advice in Australia for the benefit of both consumers and the profession. Its 10 Point Plan, released at Senate Economics Legislation Committee inquiry, includes:
- Raising the minimum criteria so that the term financial planner/adviser is restricted under the Corporations Act and the individual must:
a. Have membership of an ASIC approved professional body; and
b. Hold minimum education standards of a relevant university degree, and three years’ experience over a 5 year period; and
c. Maintain minimum continuing professional development of 90 CPD points over a triennium. - Amend the law to develop criteria so that ASIC can approve professional bodies such as those prescribed in the Tax Agent Services Act or the approach proposed by the FSA in the UK.
- The immediate establishment of a financial planner education working group (FPEWG) to develop a considered, strategic and holistic financial planner education framework. With the aim of lifting minimum education and experience standards to a relevant university degree and three years’ experience over a 5-year period.
- The term ‘Commission’ to be defined and then banned under the General Advice exemption.
- General Advice should be re-termed ‘general or product information’ and be limited to the provision of ‘factual information and/or explanations’ relating to financial products.
- The development and implementation of a co-regulatory design, which recognises and facilitates the role of ‘approved’ professional bodies in assisting ASIC to achieve its consumer protection and confidence mandates.
- The establishment of a public register which is managed by ASIC, with a requirement for all financial planners/advisers (including employed representatives) who provide personal advice to be individually registered.
- ASIC should have suspension powers for financial planners/advisers suspected of material and systemic breaches of the best interest duty. ASIC must have a justifiable position and the financial planner/adviser has the right of appeal to AAT.
- Once the Federal Budget position has been improved, that the government commence consultation with industry to determine the benefit to have the preparation of an initial financial plan be expressly stated to be tax deductible.
- A review into lifting the criteria of a sophisticated investor.
