Australia’s two largest financial advice associations say they are ready to handle an influx of members if professional association membership becomes mandatory.
Responding to the Parliamentary Joint Committee (PJC) on Corporations and Financial Services’ report on advice standards and education, the Financial Planning Association (FPA) said it supported the recommendation to mandate professional association membership for all financial advisers.
The PJC has called for all advisers to be registered in order to be able to deliver personal financial advice. To become registered under the PJC’s proposal, advisers would be required to:
- Hold a degree qualification
- Complete a structured ‘professional year’
- Pass a registration exam
- Undertake continuing professional development
- Maintain membership of a professional association and adhere to the association’s code of conduct and ethics
FPA CEO, Mark Rantall, said the Association welcomed the recommendations, because it was clear that higher standards and professional association membership delivered better results for consumers.
He estimated that planners holding the FPA’s professional designation (Certified Financial Planner) represented around 30% of the industry.
“And yet, over the last five years, they (CFP qualified members) represent less than 7% of all ASIC bannings, and less than 5% of the ASIC enforceable undertakings. So there’s one solid proof point that professional standards, ethics and accountability, plus appropriate education standards, have a significant impact on the quality of advice and the protection of consumers.
“Why wouldn’t the whole industry get behind that?”
FPA General Manager Policy and Conduct, Dante De Gori, added that the PJC’s recommendation that professional associations be accredited by the Professional Standards Councils would also provide certainty for consumers.
Hopefully the whole industry can see their way clear to line up behind some of these important changes
“There are currently a large number of associations and groups in the industry, and the consumer is none-the-wiser about whether those groups have any legitimate position around training and standards and ethics. That recognition needs to be provided to our members and their clients,” Mr De Gori said.
“We call on everyone in the industry to get behind the PJC’s recommendations. Hopefully the whole industry can see their way clear to line up behind some of these important changes, to lift – once and for all – the standards of advice for financial planners in this country,” Mr Rantall concluded.
The Association of Financial Advisers (AFA) said it had already experienced an increase in membership and enrolments to its professional designation, the FChFP, despite the fact the Government has yet to respond to the PJC’s report.
“The momentum built quickly toward the end of last year and we have responded swiftly to ensure that the AFA can continue to support the financial advice community to manage and deal with the changes being experienced,” AFA CEO, Brad Fox, said.
The AFA has subsequently increased its resourcing, adding two new staff members to the Member Services and Campus AFA team under the leadership of Nick Hakes.
The AFA said it is also conducting a significant upgrade to its Membership Experience software.
“We are well known and respected for our member engagement; the sense of community that our members feel. This investment in upgrading our software will further enhance our engagement with our members and, as new members join the AFA, they will immediately experience the value of their AFA membership and feel a part of our professional community,” Mr Fox said.
“It will also support and encourage advisers to participate in the Your Best Interests campaign which will showcase the value of advice to consumers when it goes live in April this year.”
The sooner the AFA and FPA get together with a mandate from their membership base and agree on terms to merge both organisations the better. I government and its regulatory arm ASIC are in their own words confused by the inconsistent views being put forward buy these and other smaller fringe organisations. We are not seen as a profession and this will not occur while the industry continues to produce inconsistent view on crucial subjects.
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