Mark Rantall

The Financial Planning Association of Australia (FPA) continues to champion the need to change current education requirements within the financial planning profession, focusing heavily on this in its recent submission to the Parliamentary Joint Committee (PJC) Inquiry.

According to Mark Rantall, CEO of the FPA, the submission’s focus on increasing minimum education standards and requirements for those providing personal financial advice to consumers is a natural continuation of the aspirational, but achievable recommendations outlined in the FPA 10 Point Plan released earlier this year.

“The PJC Inquiry, designed to examine financial planner education, professional standards and ethics, and recognition of professional bodies, will help advance the profession of financial planning. We welcome the opportunity to put our views forward on what specifically this advancement should look like in terms of minimum degree qualifications to be a financial planner/adviser, recognition of professional bodies and General Advice being re-named ‘general or product information’.

“Australia’s largest institutions have recently stepped up and announced they will be lifting their education standards for the benefit of consumers, and the profession. This in in line with our 10 Point Plan to restore trust in the financial planning profession. Consumers deserve this and more, which is why getting the outcomes of this Inquiry right is important.

“When implementing new standards, it’s important we lead for the future and respect the past. We therefore consider it important to introduce an appropriate transition and pathway options for existing advisers, and an approved degree requirement for new advisers from 1 January 2018.”

“We are committed to working with government, industry bodies, financial planners and consumers to ensure we live up to the expectations of our profession. When all financial planners are members of a professional association, when all financial planners are listed on a public register, when more financial planners carry the world class CFP^® designation, we are in a better position to uphold trust in our industry.”

Mr Rantall pointed to recent ASIC enforcement actions to highlight the clear distinction between financial planners who are members of a professional association and those who are not.

“Our review of data collected since 2009 on ASIC enforcement action concerning individuals in relation to financial advice, shows that FPA members represent significantly less than 5% of the overall ASIC enforcement action each year – even though they represent nearly 50% of financial planners in Australia. From a professional stand-point and in the eyes of consumers, it should be clear then that being a member of a professional body with additional regulatory oversight of professional obligations is an obvious gold standard.”

The FPA’s full submission will be available to media following its publication by the PJC.

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Dante De Gori

The Financial Planning Association of Australia (FPA) has submitted its recommendations to the Financial System Inquiry with a view to creating a more efficient, effective and innovative financial system, consistent with financial stability, professionalism and fairness.

Dante De Gori, General Manager of Policy and Conduct at the FPA, said: “The Financial System Inquiry is a valuable opportunity to assess how our financial sector can adapt to better provide all Australians with the opportunity to experience the benefits of our world-leading system.

“The FPA urges the Inquiry to consider the end user of our financial system – Australian citizens – and the role that regulators and industry participants play in ensuring their financial well-being. This includes a consideration of how Australians can better engage with the financial system, including affordability and access to professional services such as financial advice. To this end, we again call for the tax deductibility of upfront financial advice fees as a key recommendation in our submission.”

In addition, the FPA has again emphasised the need to differentiate between general and personal advice with respect to their relevance in regulating financial advice.

Mr De Gori stressed, “The current framing of ‘general advice’ versus personal advice exposes investors to undue risk, with respect to the regulation of financial advice. Many retail investors are not be able to distinguish between general and personal advice and are at risk of making inappropriate financial decisions for their specific circumstances as a result. A review of the general/personal advice definitions, and the risks these definitions pose to consumers, should therefore be considered as part of the Inquiry.”

The FPA highlighted several key areas where reforms would improve Australia’s financial system efficiency, as well as foster stability, prudence, and public confidence. The FPA submission calls for:

• The role of professionalism and professional obligations to be included in the regulatory design of the Inquiry, particularly where professional obligations would improve the efficiency, competitiveness, financial stability, public confidence, and capacity of the financial system.
• A better facilitation of industry participants working with regulators and the government through co-regulation models, to improve efficiency and further enhance professional values in the sector.
• Enhanced fairness of Australia’s financial system. The FPA recommends the Inquiry should recognise and respond to varying degrees of wealth and opportunity which prevent some users or potential users of the Australian financial system from fully engaging with the system.

Mr De Gori concluded: “The FPA welcomes the opportunity to contribute to the Inquiry. We look forward to working together with FSI panel to cultivate a financial system that meets the needs of its users, both the professionals and bodies who comprise it and, ultimately, the end users of our financial system – Australian citizens.”

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