FPA calls on next Parliament to prioritise CSLR, planner education requirements, ASIC funding model, action on ‘finfluencers’ and regulatory reform

The next Australian Parliament must provide certainty to the financial planning profession on issues such as the Australian Securities and Investments Commission’s (ASIC) industry funding model and education standards, prioritise the creation of a Compensation Scheme of Last Resort (CSLR) and further regulation of ‘finfluencers’, as well as provide tax deductions for the provision of financial advice says the Financial Planning Association of Australia (FPA).

The FPA has released its 2022 Federal Election Platform, outlining what it would like to see addressed by the 47th Australian Parliament.

“We look forward to working with parties and stakeholders on policies and initiatives that contribute to affordable financial advice for all Australians and a sustainable financial planning profession for the future,” says FPA chief executive Sarah Abood.

The FPA cited the creation of a CSLR as a high priority, saying its design and implementation should ensure that consumers are covered for the full range of matters considered by the Australian Financial Complaints Authority (AFCA) including managed investment schemes, and that the Government bears the costs of the establishment and any legacy claims relating to the scheme.

The FPA says the administration costs of a CSLR should be closely monitored to ensure that cost recovery from industry primarily compensates consumers rather than covering bureaucracy and administration.

Regarding reforms to education requirements for financial planners, Ms Abood says the profession has been left in limbo.

“After a flurry of proposals and announcements over the Christmas/New Year break, financial planners who had not yet completed their education under the current requirements have been left uncertain as to what to do.

“While we certainly recommend continuing these studies under the precautionary principle, it’s a significant commitment for many We’re calling for both major parties to consult with the profession and clarify the detail as to how any changes to current education requirements would be finalised and implemented.”

The FPA is also calling for sensible measures to improve the affordability and accessibility of financial advice, such as reducing regulatory complexity and duplication as well as providing Australians the ability to claim a tax deduction for the provision of financial advice, regardless of the stage in the advice process

In relation to Treasury’s review of ASIC’s industry funding model, the FPA says it should report its findings before the freeze on ASIC levies charged for personal advice to retail clients expires.

In addition, the FPA has called on regulators to take more action on ‘finfluencers’ to ensure that Australians only act on the advice of licensed, qualified and professional financial planners.

The FPA says it has long been concerned about the apparent ‘two tier’ approach to the regulation of financial advice, where social influencers operating online seem to be treated differently to financial planners.

Ms Abood says the FPA’s election platform is confined to matters on which it believes require executive and legislative action during the next Parliament.

“We acknowledge and support the ongoing review of financial services laws and regulation by the Australian Law Reform Commission, and are engaging constructively in this process,” Ms Abood says.

“Likewise, we welcome the commencement of the Quality of Advice Review led by Ms Michelle Levy and supported by the Treasury.

“A number of matters of great importance to our profession will be addressed through these important evaluations and we welcome the current bipartisan approach and support for their delivery.”

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