FPA supports efforts to increase educational standards.

The Financial Planning Association of Australia (FPA) strongly supports moves by Australia’s largest financial planning groups to lift the education standards of financial planning professionals, calling it a positive step in the right direction for the profession and its clients.

Mark Rantall, CEO of the FPA, said: “Australians have the right to know that when they look for financial advice, they can trust the person they work with. Part of that trust lies in the qualifications and experience of the financial planner.

“Recent announcements by large financial planning businesses to increase education levels reflect a major change for the profession and for its clients. These changes also take us closer to having a self-regulating profession.

“We want Australians to feel empowered and realise the benefits of trusted financial advice. This is why it is important for them to know that their financial planner is a member of a professional association, and is appropriately qualified.”

According to Mr Rantall, Australians can view the Financial Planning Association’s Certified Financial Planner^® designation as a proxy for trust. The large financial planning businesses who have undertaken to raise standards will use the Certified Financial Planner^® designation as part of the qualifications they will require their financial planners to have.

“The Certified Financial Planner^® designation is one way Australians can know they’re dealing with the best – a financial planner who has the right education, who is bound by a code of ethics and who is committed to their clients’ best interests.”

The Certified Financial Planner^® designation is only available to financial planners with a degree covering areas such as finance, superannuation, estate planning, insurance, financial planning, taxation, investment and commercial law. It then requires a further two-three years to complete the certification. The financial planner must have three years’ experience to qualify and then must complete 40 hours of ongoing professional development each year. This requirement is subject to audits by the Financial Planning Association.

Mr Rantall said the FPA is hopeful the financial planning profession will continue to take the necessary steps to continue to raise the bar in terms of education and self-regulation. He pointed to a fully transparent, public register of financial planners as another necessary move to ensure consumers have access to the right information to make a truly informed decision when choosing a financial planner.

“We strongly support a financial planner register and see this move as critical to being a transparent and trusted profession, alongside the requirement that financial planners operate as a member of a professional association under an ASIC and the Tax Practitioners approved code.

“The FPA, through its professional members, stands with Australians for a better financial future. We have more work to do with our members, financial planning groups, regulators, government and industry bodies to ensure we live up to the expectations of our profession and its clients.

“Helping people make decisions about their financial future is a critical job and we are committed to ensuring we get this right,” Mr Rantall concluded.

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Mark Rantall

The Financial Planning Association (FPA) welcomes the announcement from the Commonwealth Bank of Australia (CBA) about measures to improve adviser education and training, increase transparency in adviser quality and support the FPA 10 Point Plan.

Mark Rantall, CEO of the FPA said, “We recognise the strong move the CBA has made in its Open Advice Review program. It demonstrates commitment to deliver a fair and consistent outcome for customers.

“CBA has listened to industry feedback and acted,” Mr Rantall said.

“When all financial advisers are members of a professional association, we are in a better position to build a self-regulatory model under which all planners act in accordance with both regulation and a fully enforceable professional code that commands conduct above legal requirements.

“We remain committed to seeing the term ‘financial planner’ and ‘financial adviser’ enshrined in law, to protect both financial planners and the clients they serve,” Mr Rantall added.

The FPA also welcomed the appointment of a highly credentialed Chairman of the Independent Review Panel, for the recently announced CBA Open Advice Review program.

Mr Rantall said, “We look forward to further announcements on the appointment of appropriately qualified independent industry experts and client advocates. The CBA compensation process is essential to restore public trust in the financial advice industry. It is vital clients receive full and fair compensation in a timely manner. We believe this first decision is a step in the right direction and look forward to further detail.”

The FPA continues to support a collective forum to develop a response to the 61 recommendations from the ASIC Senate Inquiry.

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Marianne Perkovic

Commonwealth Bank has announced new minimum education standards for Commonwealth Financial Planning Limited (CFP) financial planners, supervisors and managers of planners.

Since 2011 the Bank has transformed the CFP business. There have been changes in management, structure and culture. We have also invested in new systems, implemented new processes, enhanced adviser supervision and improved training. These new standards are an important step in increasing the educational and professional standards of our financial planners, and exceed current industry requirements.

The new education standards include:

• All new CFP financial planners, recruited from today, must hold a degree in finance, business, commerce or a related field;
• All new CFP direct supervisors or managers, recruited from today, must hold a degree in finance, business, commerce or a related field;
• Existing financial planners authorised under the CFP licence and their supervisors will be required to hold either an Advanced Diploma in Financial Planning (or equivalent) or a degree in finance, business, commerce or a related field by 30 June 2017;
• Existing Senior Financial Planners will be required to obtain the CERTIFIED FINANCIAL PLANNER® certification with the Financial Planning Association of Australia; and
• CFP commits to making membership of a relevant financial services industry association a minimum standard required of all CFP financial planners by 30 June 2015.

Executive General Manager Advice, Marianne Perkovic said both the Interim Report of the Financial System Inquiry and the Final Report of the Senate Economics Committee inquiry into ASIC concluded that educational levels across the industry need to be enhanced. Last Friday’s announcement is an important and proactive step to meeting the standards envisaged by those reports.

“The relationship between a financial planner and their customers must be based on trust. The significant transformation in this business since 2011 has been all about building that trust. This is an important next step that continues our investment in the professionalism of the advice industry.”

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