TheFinancial Planning Association(FPA) will make a concerted effort to deal with the thorny issue of disclosure with 17 separate projects set for action this year.
FPA head of professional standards and acting chief executive June Smith says the association would tackle disclosure on a number of different levels with a particular focus on the area of soft and hard dollar commissions.
As such, the FPA is working with a number of industry associations to develop universal pro forma documents which will have standard definitions of terms relating to commissions and rebates.
“There is an inconsistency in the industry over the disclosure of things such as soft dollar and referral fees with even such terms as rebate differing widely,” Smith says.
As part of the wider look at disclosure, Smith says the FPA would make a number of submissions to a joint parliamentary committee looking into commission on risk products.
It would also work with theAustralian Securities and Investments Commission(ASIC) regarding adviser disclosure and will address the issue of risk tolerance and how advisers measure it.
The FPA flagged these moves last week when it unveiled its agenda for 2003 with the quality of advice, disclosure and ongoing education being the leading issues for the year.
Despite the focus on these areas Smith says the moves are in no way a pre-emptive strike against the upcoming Australian Consumers Association (ACA) report into the quality of financial planning advice.
Rather, Smith says they are the result of the FPA’s National Quality Assessement Program (NQAP) released late last year.
The NQAP found that FPA adviser members suffered weaknesses in the key areas of disclosure, training, risk management and tailoring advice to clients.
“We know we have a program that delivers and assessment of what is going on in the industry as we are out there every day and dealing with the systemic issues in financial planning,” Smith says.
