Centric Wealth has released its own professional standards of best practice, which have received the endorsement of the Financial Planning Association (FPA).
Centric Wealth chief executive John McMurdo said that while the group had always aspired towards best practice and a fiduciary duty towards its clients, he said it and other industry leaders recognised the need for clear standards.
“We have a view that those [standards] can and should go beyond the recommendations around the Future of Financial Advice [Reforms],” he said, adding that the group has moved towards formalising a new best practice standard because Australians should have access to the very best financial advice.
The Centric Wealth Professionalism and Financial Advice Standards have received the endorsement of the FPA and encompass the FPA’s Code of Ethics. However, McMurdo said they go further to encompass standards around education requirements and qualifications, remuneration policies and governance.
McMurdo said one of the key points of the new standards was Centric Wealth’s commitment to having all advisers Certified Financial Planner (CFP) qualified and all new recruits tertiary qualified or committed to completing their tertiary qualifications. New recruits would also be inducted into a yearlong professional internship to reflect the equivalent professional year programs of other professions, such as accounting.
The new Centric Wealth professional standards also include the formalisation of its fee-for-service remuneration policy, and McMurdo stated that Centric Wealth would not charge shelf fees. The policy also applies to both existing and new clients.
A professional standards and ethics committee has also been formed to monitor and assess adherence to the new professional framework, chaired by non-executive director Chris Cuffe.
Centric Wealth is implementing mandatory membership of the FPA of all advisers and management staff, and McMurdo added that all “significant” advice, which he described as new advice or client reviews, would be signed off by a CFP planner.
FPA chief executive Mark Rantall applauded Centric Wealth for taking the initiative, adding that there was general agreement that the minimum industry entry requirements were too low.
“The bottom line is that there is no profession in the world that has an entry standard that is less than a university degree. That’s where all of this is heading, and this is what Centric Wealth have placed into their standards,” he said. “Centric’s model is a great model for this evolution of an industry into a profession. The big difference is Centric is mandating [change], which takes a lot of courage.”
McMurdo said the new policy was greatly needed and demanded by clients, the Government and regulators, professional bodies as well as “good advisers [who] want to be part of these standards and see a professional status emerge”.
