The Financial Planning Association (FPA) has thrown its weight behind the CLERP 6 reforms, but still has concerns over some of the detail.
FPA chief executive officer Michael McKenna says the framework of the proposed reforms provides the industry with both a uniform standard and the flexibility to meet the changing marketplace.
“Broadly, we are very happy with the reforms. The FPA has been advocating a uniform licensing approach for the providers of financial advice since 1995,” he says.
“Provided these are implemented well, it could place Australia financial services regulation at world’s best practice.”
McKenna’s comments follow the release of the FPA’s response to the CLERP 6 consultation paper outlining far-reaching reforms to the way financial products and advice are regulated.
While the broad strokes of the reforms have been welcomed, concerns remain over the failure of the proposal to include real estate agents in its coverage.
“We have no problems with real estate agents going about their business and selling houses. But when it comes to offering advice on negative gearing and other tax issues, that clearly is in the realm financial advice and should be treated the same as other forms of investment advice,” McKenna says.
The FPA has also voiced concerns over a plan to give consumers the choice to waive consumer rights associated with retail managed funds to access funds at wholesale rates. McKenna says consumers can already access wholesale rates via master trusts and wrap accounts which contain appropriate consumer protection.
A properly funded and appropriately staffed regulator has also been targeted by the FPA as imperative to ensuring the success of the implementation process.
“ASIC is already starting to second people from the industry and provide short term contracts. This is the sort of thing that has made the SEC such as vibrant and responsive regulator in the US,” he says.
