Mark Rantall

The Financial Planning Association of Australia (FPA) has  reported a surplus of $1,413,047 for the 2012/13 financial year.

Net assets increased to $7,339,794. Liquid assets stood at $15,020,341.

The 2012/13 result was achieved on the back of prudent expense management and a record increase in membership across all categories.

Mark Rantall, CEO of the FPA said: “We are pleased with the strong financial performance of the FPA and the fact we are on a firm footing for future growth. Equally, we welcome the strong and steady gains in our membership numbers. Planners are voting with their feet.

“The numbers give us confidence for the future and will enable the FPA to consolidate its position as Australia’s pre-eminent destination for professional financial planners,” he said.

Mr Rantall said the 2012/13 surplus would:

“Our sustainability is built on membership revenue exceeding operating costs and funding investment without the need for sponsorship or event revenue.

“The FPA is no longer reliant on sponsorship monies or an annual conference to meet its operating or funding requirements,” Mr Rantall said.

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Looking forward to working with the new Government: FPA

With a new Ministerial line-up announced today by the recently elected Abbott federal Government, Australia’s peak financial planning body the Financial Planning Association of Australia (FPA) has welcomed the announced Ministry and reaffirmed its long-running advocacy in support of better financial futures for all Australians.

“The FPA has a proud history dealing sensibly with all sides of politics to achieve equitable and pragmatic policy outcomes designed to support more Australians seeking improved financial outcomes. Our objective is always to continually raise the bar on behalf of all Australians, leading them to a greater number of highly qualified, professional financial planners operating within the construct of a world class CERTIFIED designation, approved code of practice and recognised professional standards” said FPA CEO Mark Rantall.

“We support the inclusion of financial services as part of the Treasurer’s portfolio and welcome new Assistant Treasurer, Senator Arthur Sinodinos and acknowledge the efforts of former shadow Minister Matthias Cormann in the financial services portfolio.

“The new Government, with a fresh mandate and majority numbers in the Lower House, has a window to develop innovative policies to support the greater financial wellbeing of Australians and those entrusted to maximise their discretionary and retirement outcomes.

The FPA will work hard to assist the creation of sensible policy towards this honourable aim.

“We see an opportunity to promote the clear win-win benefit of effective financial planning for all Australians working with the assistance of a CERTIFIED financial planner.  The FPA also believes there is a positive flip side to building a strong and viable financial planning profession including long-term systemic benefits to the economy, a reduction on the public social security purse and a population of Australians better enabled to take control of their financial future.”

This is effectively a double dividend: good for consumers, good for the professionals who serve them.

“The FPA and its members will continue to do its part by working constructively with Government and the Opposition towards this appropriate goal of securing the double dividend benefit of high quality financial advice,” Mr Rantall said. 

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Mark Rantall, CEO of the FPA said:

“This is a historic day for financial planning and for all Australians. The FPA has long called for ‘truth in labelling’ for the protection of consumers. The tabling of the legislation from the government responds to those calls. We welcome the introduction of the legislation and thank Minister Shorten for honouring his commitment.”

The FPA has led the pathway to professionalism in the financial planning industry and the protection of all Australians. In April 2011, the FPA called on the government to restrict the term “Financial Planner” under law. The legislation follows extensive consultation with the financial planning industry and acknowledges the protection and certainty this will provide to the Australian public seeking financial advice.

Previously, under the Corporations Act 2001, there was no constraint on individuals calling themselves “Financial Planners” irrespective of their training, competence, and even licensing. The new legislation states that only those fully licensed and authorised to provide personal financial advice can now call themselves a financial planner / adviser.

“Whilst FPA members hold some of the highest educational and ethical standards in the world, there are those who call themselves financial planners but do not have the required licensing and education to provide advice that is always in the consumers’ best interest. We expect this legislation to put a stop to those bad apples who have misled the Australian public and tarnished the profession by wrongly using this title.”

Rantall highlighted that this legislation, alongside other FoFA reforms, will bring greater consumer protection.

“If passed, this will be a great win for consumers and it strengthens the benefits of the FoFA reforms, in particular the introduction of Best Interest and the removal of conflicted remuneration. All three of these reforms should not be seen in isolation but as a whole effort by the Australian financial planning sector to turn the corner towards becoming a truly respected profession.”

“Membership of a professional body, like the FPA, provides additional safeguards to consumers in terms of the professional integrity and accountability of their financial planner. Though the tabled legislation is a significant step, the FPA will continue to advocate for membership of a professional body and/or an ASIC approved Code as the ultimate criteria for restricting the term “Financial Planner/Adviser,” said Rantall.

The legislation will now run its formal parliamentary processes and the FPA will be working with all parties to ensure its passage through government.

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FPA members have made an historic vote to usher in a new era of professionalism,overwhelmingly endorsing plans to adopt true professional status.
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“This is an important day for the FPA and for the financial planning profession. Today our members have voted for transformational change to create a peak financial planning representative body with the highest professional standards,” FPA Chairman Matthew Rowe said.
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Today’s Extraordinary General Meeting held in Melbourne, delivered over 94 per cent of votes in favour of a new three-year strategic plan that aims to elevate financial planning as a universally respected profession. To be passed, the proposition required 75 per cent of voting members to vote ‘yes’. The resounding yes vote hands the FPA a mandate to aggressively pursue its vision of a truly professional association for members and in the interest of all Australians who entrust their financial future to a CFP qualified member of the FPA.

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“This is the long-awaited beginning for our members to rebuild trust in their community that professional financial planners take utmost responsibility for delivering on a core promise of professional and ethical behaviour,” said Mr Rowe.

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“This requires all FPA members to not only act in the public interest, but be seen to do so. It also means we as a professional body will set upward education requirements, endorse higher standards and adhere to a strict code of professional practice.

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“The FPA will also remove the principal membership category with only individual planning professionals having the right to vote going forward with 87 per cent of principal members voting in favour of the proposed changes.

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“The Board and executive has received great support from both principals and members during an extensive consultation process, and evidence of this is seen in the overwhelming support achieved for the vote,” Mr Rowe said. 

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The new FPA will be supported with a $15 million brand and advertising campaign over five years to position FPA members as trusted professionals. The changes will be introduced from 1 July, for the 2011-2012 membership year with the national consumer advertising campaign to start in second half of 2011.

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“We’re excited about the opportunity to promote both the benefits of financial planning to the wider community and the advantages of seeking an FPA member when seeking advice,” FPA CEO Mark Rantall said.

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“Financial planners face a fluid regulatory environment and increasing attention from both government and consumers.

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This new strategic direction will provide financial planners a consistent voice and build the reputation of the profession as a whole,” Mr Rantall said.

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A financial planner is someone who provides personal advice to individuals and small businesses concerning financial strategies and products in areas such as superannuation, investment, insurance and personal financial management.

To practice as a financial planner, an individual must both;

• operate under an Australian Financial Services Licence (AFSL), either as a licensee or as a representative of a licensee, and
• be competent to practice

Australian Financial Services Licence (AFSL)

Licensees may be individuals or companies, so an individual offering financial planning services can choose to:

• apply for a licence either personally or for a company they control, or
• operate as an employee or authorised representative of another licensee. Large institutions such as banks and insurance companies who offer financial planning services hold licences, sometime authorising hundreds of smaller corporate or individual financial planning practices to act as representatives under their licences.

Because of the difficulties and cost of replicating the support available from large licensees and of meeting onerous compliance obligations, new entrants to the profession are usually best advised to begin by acting as an authorised representative. Even large, successful practices often do not find the move to holding a licence justifiable.

Competency

A person is competent if they have either;

• completed a course (or courses) that is listed on ASIC’s training register(see:  http://www.asic.gov.au) or
• been assessed as being competent by an authorised assessor. This second option is only available to people with relevant industry experience.

Note that there are no other options. One consequence is that a person who has relevant industry experience and who has completed training that is not listed on ASIC’s register can opt for assessment and have that training taken into account. A person who does not have industry experience, however, has no option other than to complete courses that are listed on the register, regardless of what other qualifications they may hold.

The courses or assessments which are completed must cover;

• generic knowledge of financial markets and products, and
• specialist knowledge and advisory skills for each of the particular areas (“Content Areas”) in which advice will be provided, such as:
  • Financial planning
  • Securities
  • Managed investments
  • Superannuation
  • Insurance—general and  life

A financial planner will need to complete a course (or courses) which covers all of these areas, while an insurance adviser, for example, will only need to complete a course (or courses) which covers generic knowledge and insurance.

Financial planners who advise in other specialist areas, such as derivatives or foreign exchange, will need to complete courses covering those areas as well.

Some areas, notably direct property, which is covered by State licensing laws, are not covered by RG146. Nevertheless, advice on property based securities such as REITs is caught, as is advice against securities/superannuation etc in favour of property. The production of financial plans that range more broadly than advice that is strictly limited to property also requires authority under an AFS licence and compliance with RG146.

Course standards

In order to be listed on ASIC’s register, courses must be at or beyond the standard required for a Diploma. A Diploma qualification is equivalent to 1/3 of a three year bachelor’s degree; that is, it is equivalent to one year of full time study at a university or TAFE.

BE VERY WARY OF COURSES THAT OFFER UNREALISTICALLY SHORT TIMEFRAMES, EVEN IF THEY APPEAR ON ASIC’S REGISTER. It is not possible to complete a third of a bachelor’s degree in 14 days.

Completion of courses or collections of courses that are listed may entitle the student to a qualification such as the Diploma of Financial Services (Financial Planning) {DFS (FP)} or, in the case of courses listed by universities, degrees.

Note that completion of a Diploma of Financial Services (Financial Planning) or a university degree does not automatically mean that the training requirements have been met. To be effective, the course must;

a.    be listed on ASIC’s register, and

b.     cover each of the Content Areas required. Details of the Content Areas covered are published on the training register by ASIC for each course listed.

Continuing education

When practicing as a financial planner, continuing education will be required by

a.    the law, which requires that individual training plans are prepared by the licensee, and records of training are kept, so that the competency of  each advisor is maintained, updated and developed, and

b.    the AFS licensee and any professional associations, such as the Financial Planning Association of Australia (FPAA), that are joined. These will have explicit rules about the continuing training that they require.

Further study

A popular next step from the entry level Diploma training is to complete the Advanced Diploma of Financial Services (Financial Planning) {ADFS(FP)}. Beyond this, many advisers undertake a Master’s program, complete the FPA’s Certified Financial Planner (CFP) program or undertake specialist study in areas such as self managed superannuation.

CFP

Full details of the FPA’s Certified Financial Planner (CFP) program can be found under the “Education and CPD” tab at www.fpa.asn.au, and this short summary does not pretend to provide all details.
The program comprises 4 units of study and a 5th assessment unit.

1. To commence the first 4 units of the program, a person needs:
   • 1 year’s relevant experience {usually means as an Authorised Representative (AR)},
   • to be a member of the FPA, and
   • to have a finance related degree or an Advanced Diploma (Financial Planning).
2. To enrol in the 5th unit a person needs, in addition:
   • an extra years’ (ie a total of 2 years’) experience.
3. After the study program is successfully completed, to be accepted as a CFP a person needs:
   • yet another year’s (ie total 3 years’) experience.
   • to sign on to a Code of Ethics.
   • an approved finance degree, or alternatively, any degree plus an ADFS(FP).

This means, regarding the education requirements, that:

1. the holder of an ADFS(FP) with no degree can enter and complete the CFP program. They will not be granted CFP status, however, unless at some point they complete a degree of any kind,
2. the holder of a degree that is not finance related will have to complete an ADFS(FP) to start the CFP program. On completion, they will be able to apply for CFP status, and
3. the holder of an approved, finance related degree can go straight into the program and ultimately apply for CFP status. They will not need an ADFS(FP).

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