Embed us in breach reporting regime says FPA
The Financial Planning Association (FPA) has sought to embed both itself and other professional associations in any future financial planning regulatory oversight regime through a co-regulatory approach with the Australian Securities and Investments Commission (ASIC).
The FPA has used its submission to Treasury’s review of self-reporting of contraventions by financial services and credit licensees to argue that “there is a fundamental need to recognise the role professional bodies can play in assisting ASIC to achieve its mandate under the ASIC Act, in order to improve overall consumer protection”.
It claimed that industry specific obligations set and enforced by professional bodies would “greatly complement the requirements of Corporations Law regulated by ASIC.
“Corporations Law requirements are over-arching and do not speak to the specific roles, services, and interactions provided to consumers by the various industries within the Australian financial services sector,” the FPA submission said. “Professional obligations are industry specific and provide a vital contribution to protecting consumers.”
“The FPA’s professional obligations and activity are focused on the part of the financial services sector to which the FPA belongs, that is the financial planning profession. Our obligations and activity are specifically designed to govern the conduct of our members in the provision of financial planning services to consumers, and in turn the needs of the consumers seeking the services of our members,” it said. “Therefore, they have a significant impact on the conduct of our members and the consumers they serve.”
The submission claimed that “co-regulation based on a collaborative two-way partnership between the Regulator and professional bodies is a cost-effective way to enhance consumer protection”.
“Currently ASIC’s work with professional bodies is based on limited ad hoc issues,” it said. “Formal arrangements should be established between ASIC and professional bodies, through a Memorandum of Understanding (MOU), that ensures a focused and ongoing partnership that enables parties to work openly together to deliver a stronger and more effective regulatory environment for all stakeholders.”
The FPA submission said the current system did not always allow or facilitate such arrangements creating significant inefficiencies and duplication of costs to the detriment of consumers, industry and government.
“For example, recently ASIC and the FPA simultaneously banned a financial planner, Darren Tindall.
This means, the FPA and ASIC conducted the same investigations and came to the same conclusions at the same time,” it said. “This highlights the unnecessary duplication of effort and resources that could be avoided were a collaborative approach permitted.”
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