The Financial Planning Association (FPA) has signalled it will continue with its push to clean up the profession and raise the standard of advice provided by financial planners.
Opening the association’s annual conference in Sydney this morning, chief executive Kerri Kelly said the FPA had made inroads in its bid to improve professional standards in the financial planning industry, but that the process would continue.
“Raising professional standards is an ongoing process. Standards must continually adjust to community expectations, and where appropriate keep a step ahead of them,” Kelly said.
“We have pre-empted legislation and community expectations with our work on improving payment and remuneration practice.”
Over the past few months, the FPA has released a new code of conduct on soft dollar payments for advisers, which bans some forms of soft dollar payments and requires others to be publicly disclosed. It has also introduced tougher disclosure requirements for advisers who accept rebates from platform providers and fund managers.
Kelly said another initiative – a new code on conflicts of interest for financial planners – was well developed.
“Work on a set of principles to help members develop policies to address potential and perceived conflicts of interest is well advanced. They will be released shortly to all FPA members for comment and feedback. They are developed on the fundamental premise that FPA members have a primary obligation to provide advice which is in the client’s best interests,” she said.
However, Kelly denied the FPA’s stance was driven by public criticism of advisers. She said the association’s principle motivation was simply to raise the bar on professional standards in the financial planning industry.
“We are committed to helping FPA members enhance their professionalism,” she said.
“This is not a response to the Financial Services Reform Act or to the criticism of the past. It recognises the desire of our members to give their clients the best advice for their circumstances; to make it clear, relevant and untainted by conflicts of interest.”
Kelly said the association would rely on members reporting on rival groups to catch those who do not comply with the new codes of practice.
“The FPA depends on the vigilance of all members to bring to its attention alleged breaches of its code of ethics and rules of professional conduct,” she said.
“Fourteen thousand pairs of eyes and ears are a powerful force if we work effectively to identify where standards are falling short or simply unacceptable.
“This is the strength of a professional membership association. Together with members, the FPA will maximise its role in upholding professional standards, and take disciplinary action where necessary.”
