FPA Calls for Major Overhaul of AFSL System – Registration for Individual Planners


The Financial Planning Association of Australia (FPA) is recommending a professional registration for individual financial advisers to replace the current system that requires an Australian Financial Services Licence (AFSL) to provide advice.

The recommendation is the cornerstone of  FPA’s “ground-breaking” five-year policy platform which, it says, if enacted will overhaul the way financial planners are licensed.

Dante De Gori …this is an appropriate approach and acknowledges the relationship between a client and their financial planner is a personal relationship…

FPA CEO Dante De Gori says in a statement that the law should be changed to focus the AFSL system on the regulation of financial products and remove the requirement for an AFSL to cover the provision of financial advice.

“While the AFSL system plays an important role in regulating financial products and services, recent reforms have focused the regulation of financial advice at the individual practitioner level,” De Gori says.

“This is an appropriate approach and acknowledges the relationship between a client and their financial planner is a personal relationship, not one between an AFSL and the client.

“Future reforms to the regulation of financial advice should occur through the professional standards framework and rely on individual registration of financial planners,” he says.

In this context, the FPA believes the continued use of the AFSL system to oversee the provision of financial advice:

  • Duplicates regulation
  • Creates significant additional regulatory cost
  • Introduces potential conflicts between the views of the licensee and the professional judgement of the financial planner

“The AFSL system should be maintained to provide regulatory oversight of financial products and some services,” De Gori says.

“The future regulation of financial advice, however, should occur through individual registration and oversight, and not require an AFSL for a financial planner to provide financial advice.”

The reforms come as the FPA begins work on its five-year roadmap with a three-pillar strategy focused on members, advocacy, and the benefits of financial planning to Australian consumers.

Professional registration

The statement says that with the establishment of a single disciplinary body that will require the registration of all financial planners, the FPA sees the responsibility for registration resting with the individual financial planner and not their employer or licensee.

It says that the registration of financial planners must include verification that they have complied with the professional standards for financial planners set by FASEA, including passing the professional exam, meeting the education standard and ongoing compliance with the ethical standards.

“This information should be provided by the individual financial planner and verified as correct by the single disciplinary body,” De Gori says.

“In this manner, the register will become an authoritative source of information on each financial planner, including their qualifications, compliance with professional standards and disciplinary record.”

The statement adds that by placing responsibility for registering on individual financial planners, the register will promote portability of qualifications between businesses and licensees, and promote financial planners taking responsibility for their qualifications and compliance with professional standards.

“Registration can be more bespoke, based on the skill, education and experience of the individual providing the service, rather than their licensee,” De Gori says.

“Information on the register relating to a financial planner should be verified by the single disciplinary body and represent an authorised record of whether a financial planner has complied with their professional standards.”

Separation of product and advice

The statement adds that the FPA is recommending “…several significant reforms that aim to streamline regulation of the financial planning profession. Advancing the profession is the spirit of the policy framework, which includes the separation of product and advice”.

“The regulation of financial advice is currently tied to the recommendation of a financial product, reflecting a history in which a product recommendation was the core component of most financial advice. In a professionalised financial planning sector, this is no longer the case,” De Gori says.

Regulation of financial advice should reflect the variety of advice that can be provided…

“Contemporary financial planning is about a lot more than recommending financial products. There is a wide variety of topics that might be covered by financial advice and many may not include a product recommendation. Regulation of financial advice should reflect the variety of advice that can be provided, and not continue to be tied to financial product recommendations,” he says.

The FPA believes existing requirements to deliver financial advice should be reviewed to ensure they apply effectively to financial advice that does not include a product recommendation.

“Future regulation of financial advice should focus on the broad nature of contemporary financial advice and not limit its focus to financial products,” De Gori says.

“The law should be changed to separate the regulation of financial products from the regulation of financial advice,” he adds.

Click here to access the FPA’s new policy platform document.


  1. Dante, talks a lot but almost says nothing to give treasury and the persons responsible any new ideas. Remember that the FPA has done very well financially for abiding – aiding and abetting the early masters AMP -NML. Now we tune change to harvest on a lame market. I agree that one TAX Paid authority should be the administrator, and we need to change words like RISK Insurance as there is no such insurance- The SOA should be named a COD [confirmation of discussion] Financial Planner name to be what the person does and is able to do. A Doctor of a GOG is called a VET.

  2. I was shocked this wasn’t a recommendation by Mr Hayne at the conclusion of the Royal Commission. Leaving Institutionally owned AFSLs in charge is akin to leaving a fox in charge of the hen house. Let’s not forget that the majority of the indiscretions discovered during the Royal Commission were by AFSLs, not individual Advisers.

    Then, to add salt to the wound, the same institutions that caused most of the problems for our profession were allocated the task of monitoring the new Code of Ethics. These same institutions are still taking a clip from products recommended by their authorised representatives.

    If an Adviser participated in this type of behaviour it would be a clear breach of Standards 1 and 3.

    Post Royal Commission, the same AFSLs have pushed extraordinary new compliance measures to their self employed Authorised Representatives that simply add no value to the end clients. These measures are designed to cover the AFSL’s ar$e only and have driven the cost of advice up significantly.

    In summary, AFSLs charge their self employed authorised representatives a significant fee but offer very little in terms of service to their clients (i.e. Authorised Representatives). In fact, they generally use the big stick approach. “Do what you are told or we will remove your authority to operate”. At best, they become dismissive and unhelpful.

    The current licensing regime creates a significant power imbalance, a situation that must end if we are to truly move to a profession. A model where financial advisers select the services they wish to receive from the institution will dramatically improve the service received and their attitude. Moreover, this will ensure the focus returns back to providing superior outcomes for the end clients.

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