Mark Rantall

The Financial Planning Association of Australia (FPA) yesterday responded to the report from the Australian Securities & Investment Commission (ASIC) into the life insurance advice industry.

The report refers to over 200 pieces of insurance advice that have been reviewed by ASIC with the report covering lapse rates and advice quality. The report noted product innovation by insurers and age-based premium increases as some of the drivers behind high lapse rates. The report also raised concerns with training and competency for insurance advisers. This further reinforces the need to raise financial adviser education standards as proposed in the FPA’s submission to the Parliamentary Joint Committee (PJC) Inquiry.

Whilst the FPA is not sure that any of its members have been involved in the advice given, the report reinforces the benefits and need for professional standards such as the FPA Code of professional practice. FPA members are bound by a Code of Professional Practice and as a professional association, the FPA is a firm advocate for higher professional and education standards. Irrespective of remuneration models, FPA members are bound by its Code of Conduct and are held accountable to this. Specifically the FPA can point to Rule 4.10 in the Code that states:

The Member must only make a financial planning recommendation to a client requiring the client to dispose of, cancel, or replace one product or service with another where it is consistent with the requirements in Rule 4.7 and appropriate for the client having regard to any cost, benefit, risks or adverse consequence of:

Any FPA member found to breach rule 4.10 will be subject to the FPA disciplinary process. The FPA has a Life Risk Specialistion (LRS^®), however its disciplinary records show negligible complaints, less than one per year since 2009, made against FPA members relating to life insurance advice.

Mr Rantall stated that “The issues of product design, distribution and embedded product commissions should be looked at by the product manufacturing sector as noted in the recommendations of the report.

“The FPA is focused on advice and we will review the ASIC report and suggested recommendation to review training and the proposed checklist. We are happy to work with other professional associations in the advice space to see how the advice process, guidance or education can be improved.”

“Most financial planners do the right thing and act in their clients’ best interest, providing high quality advice to their clients.”

The FPA submits that many of the issues within the life insurance industry relate to product design, regulatory barriers, pricing, data feeds and public confidence in insurance companies.

Mr Rantall concluded by saying: “We all know that as a nation we are grossly under-insured. Australians need to have appropriate advice on their insurance needs and a professionally qualified financial planner can provide that advice. This recent report should not discourage consumers from turning to a professional for advice – but it does again highlight the need for consumers to turn to a trusted, certified financial planner.”

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James Kenny

The search for Australia’s top financial planners has kicked off again with submissions to the prestigious 2014 Financial Planning Association of Australia (FPA) Awards now open.

Mark Rantall, CEO of the FPA, says that the awards are timely given recent events in the industry, “As a profession, we have been under intense scrutiny in the last 12 months, and now more than ever we need to be celebrating the best of the industry and those who not only comply with the FPA Code, but really make a difference in their client’s lives.”

The FPA Code of Professional Practice holds members to a high standard of ethics, practice standards and professional conduct. The FPA Awards recognise financial planners who adhere to this Code and provide superior results for their clients.

“We often hear stories of planners going above and beyond for their clients, and the FPA Awards are a great way to recognise their hard work and acknowledge the positive impact that financial advice can have,” Mr Rantall said.

“Winners of the FPA Awards will be those planners who have complied with the Code, delivered great results, and contributed to the profession through community involvement, mentoring and support to their local FPA member base.”

The FPA Awards, previously known as the Best Practice Awards, have become a recognised and coveted symbol of trust and reassurance to Australian consumers looking for advice from a financial planner. Previous winners of these awards have experienced benefits from both a personal and business perspective.

James Kenny, winner of the 2013 CFP® Professional FPA Award “Winning the ‘2013 FPA Certified Financial Planner® Professional Best Practice Award’ has helped to promote, differentiate and add greater credibility to my service offering as a professional Financial Planner. In an evolving profession, the FPA awards provide an invaluable opportunity to promote our profession and the value of great advice for consumers. Although the prize that I received as a category winner was noteworthy, it really paled in comparison to the significant boost in business that I’ve experienced, largely due to the publicity and media opportunities that followed. I would encourage all Financial Planners that provide high quality, professional advice to their clients to enter the 2014 Awards and benchmark their advice against Australia’s best Financial Planners.”

All members of the FPA are eligible to enter the awards. As with previous years, the FPA Awards will be divided into three categories:

• FPA CERTIFIED FINANCIAL PLANNER® Professional of the Year Award
• FPA Financial Planner AFP® of the Year Award
• Future2 Community Service Award

Winners will be identified for each region and from these winners, a national award will be presented.

The deadline for submissions for the FPA Awards is Friday 12 September and winners will be announced and profiled in October in the lead up to the 2014 FPA Professionals Congress on 19-21 November, where they will be presented with their awards.

The three national winners receive free entry to the Professionals Congress and $5,000 towards either a client event or professional development.

For more information and details on how to enter the awards, please visit www.fpa.asn.au/awards

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