The Financial Planning Association (FPA) has urged the Accounting Professional and Ethical Standards Board (APESB) that financial planners are currently heavily burdened by regulatory change and are in poor position to deal with plans to limit remuneration to fee-for-service.
What is more, the FPA has asserted the accounting fee for service model is not transferable to financial planning.
In a submission filed with the APESB, the FPA has pointed to the range of issues currently confronting planners, and warned that any move by the accounting body to limit remuneration to fee for service would “have a significant impact on the profession at this time”.
“The industry would not currently be in a position to fund such a drastic change in policy,” the FPA said.
On that basis, the FPA submission said it would encourage the APESB “to focus on access to advice for consumers”.
“Limiting remuneration to a fee-for-service basis, could cut off remuneration options that make advice accessible and affordable to consumers,” it said.
“There is also a strong need to understand the difference between accounting services and businesses, and financial planning services and businesses,” the FPA submission said. “Accountants’ services are more transactional in nature and are limited to tax matters. Financial planning businesses can manage millions of dollars for their clients – the larger the client portfolio, the more time is needed to appropriately service the client, and the higher the risk of things going wrong.”
It said financial planners needed to have the ability to charge an appropriate fee commensurate to the risk, size and complexity of the client.
“All financial planning fees are required to be offered to and accepted by the client, and it is a legal requirement to ensure they are in the best interests and appropriate for the client,” the FPA submission said. “This client engagement and choice is vital. An accounting fee-for-service model is not transferrable to financial planning. They are different services and business models.”