The financial planning industry would be better served by being covered by just one professional association, according to the Association of Superannuation Funds of Australia (ASFA).
A submission written by ASFA chief executive, Pauline Vamos responding to the Parliamentary Joint Committee has taken issue with the Government adopting a regime which would allow planners to be a member of multiple professional associations approved by the Professional Standards Council (PSC).
“We have some concerns about multiple professional associations and about PSC approval,” the submission said.
“One of our concerns with multiple professional associations is that this creates unnecessary duplication, the risk of different standards and greater risk due to lack of scale.”
The submission said a single association regime would also have synergies that would be lost in a multiple association regime.
“Our concern is that any additional costs could be significant and will inevitably be passed on to the consumer in an environment where price is often an inhibitor to people seeking financial advice,” it said.
The submission said that ASFA’s second concern related to maintaining consistency of codes and standards between the bodies and the additional regulatory oversight needed to monitor them.
“Currently there are properly working examples of both models. Practicing solicitors and actuaries are required to be members of a single professional association while accountants, on the other hand, can choose between associations.”
“We note that a single association model appears monopolistic. Given the non-commerciality or need for competitiveness in the professional association arena we do not consider this to be a problem,” the ASFA submission said.
It said that for these reasons, ASFA believed it was in the best interest of consumers and the industry for the Government to adopt a single professional association regime.
“This being said if the Government opts for multiple professional associations it will be essential that they are required to have consistent codes and standards,” the submission adding that ASFA’s primary concern with PSC approval of professional associations was “the optics of limiting liability of financial advisers (and imaginably licensees) which is the cornerstone of the PSC model”.
It suggested that an alternative to PSC approval would be for another government agency (such as ASIC) to be the approving entity, similar to the way the Tax Practitioners Board had the role of approving associations in the tax advice industry.
