TheFinancial Planning Association(FPA) and theInvestment and Financial Services Association(IFSA) have joined forces to warn theAustralian Prudential Regulation Authority(APRA) against unnecessarily buying into the debate about the nature of the financial planning industry.
In a joint announcement last week, the groups said APRA may have broken ranks by commenting on the structure of the financial planning industry.
The groups were responding to comments made by APRA executive general manager Charles Littrell late last year, who was quoted as saying the retail investment industry was “based on bribery” when referring to commission based financial planners.
FPA chief executive Ken Breakspear says the comments will only confuse advisers about the regulatory responsibilities of APRA and theAustralian Securities and Investments Commission(ASIC), which has the greater responsibility over the supervision of the financial planning industry.
“I think it is important we do not have crossed messages and mixed signals from our regulators. We see no advantage of APRA buying in here. It is just going to confuse advisers,” he says.
The chief executive of IFSA, Richard Gilbert, says APRA and ASIC need to be clear about their own responsibilities before commenting on the nature of the financial planning industry.
“If we have market failure, we don’t want ASIC referring to APRA and saying it’s your job, or APRA referring to ASIC and saying it’s your job,” he says.
However, Littrell has rejected the notion that his comments were out of place.
He says APRA reserves the right to comment on financial planners in as far as they are used by the entities it regulates, such as superannuation funds and life offices, in the distribution of their products.
“If our entities are too aggressive in writing business [through financial planners], that is relevant to us,” he says.
IFSA and the FPA also announced last week they would collaborate to defend the Financial Services Reform Act (FSRA), arguing the legislation had come under attack recently by media and industry commentators.
“The FSRA was five years in the making, it is one year into a two year transition, and there are people out there trying to seriously undermine it,” Gilbert says.
