The Financial Planning Association’s (FPA’s) proposals for individual adviser registration to practice has received a nod from the Federal Government if it is likely to hasten the move towards planning becoming a profession.
Asked to comment on the FPA’s proposals, which would involve individual adviser registration replacing their authorisation status under a licensee, the Assistant Minister for Superannuation, Financial Services and Financial Services Technology, Senator Jane Hume, made clear the Government’s priority was the formation of a profession.
She said the Morrison Government was committed to reforms which would move planning from a sales culture to a profession.
“There is a bi-partisan, industry led commitment to move financial planning from its origins in a sales culture to a true profession. Australians who put their financial future in the hands of advisers expect nothing less,” Hume said.
“As Commissioner Hayne said: ‘Making financial advice a profession is important, not merely for its own sake, it is a necessary step to protect those who seek financial advice’.”
Hume’s comments on the FPA policy move come against the backdrop of a rebuff by six key licensees, five of whom have FPA professional partner status, who claimed they had not even been consulted on the adviser registration move and questioned whether it would be in the best interests of clients.
It also came amid hesitancy from the Association of Financial Advisers (AFA) which had previously worked closely with the FPA in seeking, with other adviser groups, to form a code-monitoring body.
AFA chief executive, Phil Kewin said that while his organisation was closely examining the FPA’s approach he believed it would be far from straight-forward involving issues of professional indemnity insurance (PI), regulatory compliance and the workings of any future compensation scheme of last resort.
“It is complex and there would be a lot of disruption,” he said.