The Financial Planning Association has used its submission to the Senate inquiry into the performance of ASIC to once again call for the terms ‘financial planner/adviser’ to be enshrined in law.
In its submission to the Senate Economics References Committee (SERC) inquiry into the performance of the corporate regulator, the FPA has recommended that professional bodies should play a greater role in the regulation of the financial advice industry.
Specifically, the FPA is calling on the Government to introduce legislation that restricts the use of the terms ‘financial planner/adviser’ to those practitioners who are members of a recognised professional body.
‘It is our strong belief that to strengthen consumer protection and to facilitate a more effective regulatory design based on cooperative co-regulation, consideration must be given to restricting the term financial planner/financial adviser to only those that have the highest level of education, competency, ethics and standards, and are a member of a Regulator ‘prescribed professional body’,’ the FPA said in its submission to the inquiry.
Without the support of a legal requirement to adhere to professional obligations, there is a gap in the regulatory design
‘For co-regulation to be effective, legislative support is required to ensure membership of Regulator ‘prescribed professional bodies’, and therefore adherence to professional obligations. Without the support of a legal requirement to adhere to professional obligations, there is a gap in the regulatory design as applied to individual providers of financial services to consumers, and consumer protection becomes reliant on the limitations of regulatory and licensee obligations alone.’
The Association put forward a similar argument to the previous Labor government, during its consultation with industry on its ‘Enshrinement Bill’. The intent of Labor’s legislation was to limit the use of the terms financial planner/adviser to those who were appropriately licensed by ASIC.
In response to the draft legislation, the FPA said at the time: ‘Australians deserve the best possible advice from the most qualified practitioners – and these practitioners should be bound by a professional framework that goes beyond the law and requires adherence to standards of conduct, ethics and education, which are specifically tailored to the provision of quality financial planning advice.’
The former government’s ‘Enshrinement Bill’ was passed by the House of Representatives on 29 May, 2013. However, the Bill’s passage through Parliament was stalled due to the Federal Election. The legislation has now lapsed and will not proceed.
In addition to the reintroduction of enshrinement legislation, the FPA has recommended to the SERC inquiry that there be:
- Greater engagement between ASIC and the industry’s professional bodies, via the establishment of a formal Memorandum of Understanding
- Measures that help to manage regulatory overlap between ASIC and other regulators (such as the Tax Practitioners Board)
- An increase to ASIC’s powers to allow it to oversee the activities of product manufacturers and research houses
For more on the SERC inquiry, see:
- ASIC Seeks Greater Powers
- AFA to Regulators – Treat Us All Fairly
- ASIC Admits to Lack of Communication on CFP Matter
- ASIC ‘Incompetence’ Leads to Senate Inquiry
Ahh FPA still trying to feather its own nest without due regard for someone who does not want to join an organisation that had Storm as a member.
Professionalism is a deed not a membership number FPA.
Mark
I don’t agree with you on this.
Whilst I agree that the ball was dropped in regards to Storm, I’m not sure of the details behind the FPA and Storm.
Certainly, Storm were notorious within the industry and, had the facts been clear to the FPA and they hadn’t acted then that is a concern.
However, in the absence of more information, by your logic, the AMA is damned because Dr Patel was a member of that association at the time of his alleged misdeeds.
Furthermore, unlike the FPA, the AMA actually has the power to impose meaningful sanctions on members including expulsion and so are further damned.
The FPA has limited power to self-regulate in any meaningful way. Certainly, they can, and should, expel members who breach standards. However, when those members are free to continue to practice, such sanctions are meaningless.
Self-regulation and, by extension, membership of a professional association is a feature of a profession.
That is why I am an advocate of compulsory membership of a professional association.
Mark are you trying to buy yourself a future and capture the market? what digit wants Enshrinement, THE FPA seems to have forgotten why it was formed, now all it wants to do is have a hapless little ceremony that means nothing.
What you should be doing is making INSURANCE COMPANIES and FUND MANAGERS accountable, ensuring that legislation does not have a negative impact on our industry like contributions limits, making sure that THE CPA does not move in and take over.
Ensuring the ASIC is held accountable and that FOS is representing advisers clients and reporting multiple offenders.
Get on the back of industry funds and the like who hold 2,3,4,5 policies in the one persons name and do nothing about merging them.
They all do it, this is for the better good of the industry not a stupid piece of legislation and Enshrinement, why does one person have multiple policies something for you to work on ? no you probably cant get that Enshrinement if you do.
objecting to the removal of commissions on insurance and representing your members not yourself, working with the ASIC and helping the industry grow, all you seem to want to do is dictate and cement your own income and future what about the future of the people who put you in power today?
who’s future are you concerned about? its not the adviser from what I can see, all I can see is you working with government so you can have control, well its not going to work my Local Senator will see to that.
Enshrinement what is that BUDDA yes we can all have BUDDA at the end of our names work on something meaningful and useful or get another job and allow someone to make a difference.
Oh read the risk info about an APL that rates being paid as the highest feature of a product, NO Peter Kell says relationships make no difference its product wording and if you move one person from one product to another and its a product definition issue its churning, its what. No Peter its relationships, the insurance industry like any other has politics and I have seen advisers agreements CANCELLED because they relationship has ended.
The adviser has a client claim and all hell breaks out do you blame the adviser for moving his clients you call it churning isn’t that what you do to butter?
How about my PI, It raised by 50% no claims, yet gone through the roof what are you doing about that?
What does the FPA do today? it was once just a mutual representation not for profit well that’s changed now hasn’t it.
Business class airfares charging advisers for conferences, making profits out of conferences, lets face it FPA if your members cant trade or go broke you wont have an industry to screw fees from.
An industry super fund last year had 2 employer contributions for one employee it set up 2 policies and said oh we did not realise yes the occupation was the same, the date of birth was the same the address was even the same however one had his name down with a middle name included and the other omitted it so we could not tell they were the same people, when it came to claim this member had 2 IP policies and his income justified both but no the industry super fund refused payment on both policies.
So FPA what about the industry super fund advertising? AVIVA before it became MLC constructed a TV campaign only to have the Government stop it. Well the comparisons run by Australian Super profit for members only is not based on industry true figures, How can they say that? how can the FPA allow it? this is your job not Enshrinement.
FOS determinations its time you stood up to FOS look at the determinations and represent your members by forcing FOS to be accountable. FOS have made some determinations of late you have to see to believe, for example FOS say that if a policy wording is not clear then the Insurance company gets the benefit of the doubt.
The FPA should have a register and help its members with this stupid government white elephant who has forgotten why it was formed it thinks its a court its exempt from the AAT why?
How is it that someone can get paid $3,200.00 an hour make record profits in a declining economy? THE BANKS the secret commissions and the extraordinary fees How about NRAS the real estate agents getting paid $10,000.00 for 1 sale and se3lling investment properties without an AFSL.
So FPA perhaps you could start with A BANK ask how can they be FOFA compliant? how does a bank employee who recommends its own products get away with it?
Perhaps banks should not have financial planners it has to be a conflict of interest.
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