The Financial Planning Association of Australia (FPA) welcomes the Government’s proposal to establish a new disciplinary function for financial planners but is calling for further refinement to improve the model, including the creation of a true professional registration for financial planners.
In its submission to the Treasury’s consultation on Single Disciplinary Body for Financial Advisers, the FPA has thrown its support behind many of the measures proposed by the Government.
The proposed model includes important reforms that are at the core of the FPA’s policy platform – Affordable Advice, Sustainable Profession – including removing duplicate professional standards applied by the Tax Practitioners Board (TPB) and creating a disciplinary function with the powers and expertise to directly respond to misconduct.
“This is a major reform which will have a lasting impact on our profession, our members and the consumers they advise,” FPA CEO Dante De Gori said.
“The FPA has long advocated for the need for reform to reduce duplication and rising costs facing financial planners. We welcome the recognition of this in the draft legislation with the proposal to wind up FASEA and removing the redundant oversight of the TPB being important steps in achieving this goal.
“However, it is crucial we get this right and ensure the success of the proposed model. Our key recommendation for this draft model is to create a true professional registration which is a personal requirement for all financial planners.”
Positive flow-on effects
The proposed model makes the registration of a financial planner the responsibility of their AFSL. The registration is then contingent on the planner’s ongoing engagement by the AFSL and effectively duplicates the existing authorisation process.
The FPA argues that a professional registration should demonstrate that an individual has met their professional requirements, is in good standing in the community and is ready to serve their clients.
“A financial planner’s registration should then follow them throughout their career and be a valued symbol of their professional status and commitment to uphold professional values. The creation of a personal obligation to register is an essential component of any professional framework,” Mr De Gori said.
“It’s the missing piece to the puzzle. Similar to the legal, medical or architectural professions, the FPA strongly supports a model in which registration is the personal responsibility of each financial planner and is not connected with their employment or authorisation under an AFSL.”
“A true professional registration will have flow-on benefits for consumers as it will improve the quality of the information on the Financial Adviser Register and ensure anyone can easily check the qualifications, registration status and disciplinary record of their financial planner.
“Establishing a professional registration for financial planners is a perfect opportunity to build the Financial Adviser Register into the valuable resource that it could be,” concludes Mr De Gori.
The FPA has also recommended some improvements to the proposed reform relating to the TPB. While the proposed reform is positive and addresses obvious duplication, the current drafting does not meet the Government’s intention of creating a single set of professional standards for financial planners and a single regulatory regime. The FPA recommends that the draft Bill remove the requirements for AFSLs and Corporate Authorised Representative (CARs) to register with the TPB.
“The FPA continues to believe that the best outcomes for both financial planners and consumers come about when the Government and the profession work together on the issues that we are facing,” Mr De Gori said.
“We look forward to continuing our discussions with Government on the issues most critical to our members. We strongly encourage our members to keep sharing their feedback on what further support they need so we can continue to build a thriving profession.”