The Financial Planning Association (FPA) wants the current system of Australian Financial Services Licence (AFSL) to be replaced by a professional registration for financial planners.
The FPA has made the call part of its five-year policy platform which it claims would represent a significant overhaul of how financial planners are licensed.
Announcing the policy push, FPA chief executive, Dante De Gori said the law should be changed to focus the AFSL system on the regulation of financial products and remove the requirement for an AFSL to cover the provision of financial advice.
“While the AFSL system plays an important role in regulating financial products and services, recent reforms have focused the regulation of financial advice at the individual practitioner level,” he said.
“This is an appropriate approach and acknowledges the relationship between a client and their financial planner is a personal relationship, not one between an AFSL and the client. Future reforms to the regulation of financial advice should occur through the professional standards framework and rely on individual registration of financial planners.
“In this context, the FPA believes the continued use of the AFSL system to oversee the provision of financial advice duplicates regulation, creates significant additional regulatory cost and introduces potential conflicts between the views of the licensee and the professional judgement of the financial planner.”
“The AFSL system should be maintained to provide regulatory oversight of financial products and some services,” De Gori said.
“The future regulation of financial advice, however, should occur through individual registration and oversight, and not require an AFSL for a financial planner to provide financial advice.”