FPA and AFA to benefit as planner code monitors
The Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) may experience a strong influx of members if they emerge as the two financial planner code of conduct monitoring bodies.
The new code of conduct has yet to be devised by the Financial Adviser Standards and Ethics Authority (FASEA) but FPA chairman, Neil Kendall believes that the FPA has already made the necessary investment and is well-placed to take on a formal code-monitoring and discipline role.
Speaking to Money Management, for his part, Kendall said code monitoring status was something the FPA had been quite deliberately working towards since the implementation of the Future of Financial Advice regime.
“We’ve worked very hard on being a code-monitoring body, we’ve got a framework in place and we’ve got the ability and the knowhow and we’re positioned for that,” he said.
Kendall agreed that, given the costs and resources required to maintain code-monitoring status, it was likely to reduce the number of organisations claiming to represent planners in the industry.
He suggested that the costs required to establish code-monitoring capacity from a standing start was around $3 million.
As monitoring bodies, the FPA and AFA would be expected to operate compliance schemes to monitor and enforce relevant providers' compliance with the code of ethics.
ASIC is scheduled to release a consultation scheme on the criteria which will apply to code-monitoring bodies after the code is released by FASEA.
ASIC has made clear it will only approve a compliance scheme if it is satisfied that:
• Compliance with the code of ethics will be appropriately monitored and enforced, and
• the monitoring body has sufficient resources or expertise to carry out that monitoring and enforcement.
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
