FPA canvasses new licensing options

The Financial Planning Association (FPA) has directly asked members whether licensing arrangement for financial planning should change and about the future status of Australian Financial Services Licensees.

The question has been posed in a discussion paper launched by FPA during its national congress in Melbourne and refers directly to matters raise during the Royal Commission.

The discussion paper canvasses a range of issues but significantly focuses on both regulation and licensing asking whether the current regulations achieve their goal and whether licensing arrangement for financial planning should change.

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It then asks whether, if licensing arrangement should change, what planners would recommend?

“In this context, there also remains several outstanding recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry,” the discussion paper said.

It noted the Royal Commission recommendation 2.10 suggesting the establishment of a single, disciplinary body for financial planners, stating: “While it is not clear how the Government will implement this recommendation, the Royal Commission was attempting to address the complexity, overlap and potential inconsistency that currently exists”.

It said the Royal Commission also identified a need to simplify the law governing financial services, remove exceptions and qualifications in the law and focus on fundamental norms and that “as an example, it identified the best interest duty and associated “safe harbour” provisions in section 961B of the Corporations Act”.

The discussion paper, launched by FPA chief executive, Dante De Gori is aimed at allowing members to respond to the issues via the organisation’s FPA Community. Next month.




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Get rid of "authorised representatives". It is impractical for a licensee to effectively monitor and manage self employed advisers over whom it has little visibility or control. No amount of compliance audits or "regtech" can solve that problem.

Every self employed adviser should be required to get their own AFSL, or give up self employment and become a direct employee of an AFSL holder.

Right because if we become all self licensed through ASIC they have the capacity to monitor all 23K advisors...

To say it is impractical for a licensee to monitor anyone is completely false if all authorised reps have the same software/reg tech. Issue is licensees have let advisers use whatever software they want which is a factor to all of the problems.

Again if licensees "supposedly" cannot monitor all advisers, why would ASIC be better placed to do this?

No need for ASIC to monitor all advisers directly, just licensees. Most advisers would probably be employees of a licensee in the model proposed above. A licensee has far more control and visibility over employees than it does over self employed "authorised representatives". Employees can be easily compelled to use the same software, advice methodology, training, etc. Trying to do this with disparate self employed advisers will always be like herding cats, because self employed advisers inevitably have different systems and approaches and will want to cling on to them regardless of what the licensee says. The control a licensee gets from an AR agreement will never be as great as that from an employment contract.

If self employed advisers want to retain control over their business they should make the effort to get their own AFSL. If they aren't prepared to accept the responsibility and effort associated with that, they need to cede control to someone else and become an employee. The current "half in half out" authorised representative model is not sustainable in an environment of heightened regulatory scrutiny.

How does Medical Profession monitor all those Doctors? ..Your point makes sense in that Doctors need to be licensed by Drug Manufacturers so that the Drug Companies can monitor there behavior, provide their training (limited to providing those drugs) and restrict the supply of Drugs to a limited well researched firms , called the Approved Drug Lists or ADL. The last thing we want is rogue Doctors randomly dispensing medical advice and no regulatory body keeping them under control. Heaven help us if those Doctors had to invest heavily in there education and put skin in the game. What's also interesting is how their Medical Associations only allows Doctors, Students into their association and they get effective representation.. crazy unlike the FPA that allows the equivalent of Phizer to run the show. Self licensing Rubbish.

As I mentioned to Dante a little while ago, an advisor needs to be able to provide advice free from the influences of their dealer group, product providers and other special interests groups. This will never change unless every advisor is individually licensed directly through ASIC and can come up with their own investment/insurance/lifestyle and cash flow philosophies for their clients. An advisor needs to use his or her own training, education and experience when providing and delivering advice. It is this simple. Otherwise advisors will continue to be sales people whom push product.

Adam G, you're the type of advisers we don't need in this industry. One point you're talking about advisers being free of conflicts and yet on the other you're a fully paid up FPA member. A body that via the professional partner program is getting payments from licensees owned directly by product manufacturers to quote the FPA.....shape the future of advice in Australia. You've got some funny standards there buddy, perhaps you should do some inner reflection. Another example if Go and have a chat to your FPA buddies and ask who paid for their FPA membership fees, CBA ?

Definitely am not a member anymore (for the very reason you have noted, amongst others) and have always paid for membership fees out of my own pocket.

Good job, we need more planners to leave so that one day we'll have industry bodies that put the needs of Australians and Planners first. Professionalism is having nothing to do with the FPA.

I am with Adam. he is on the money. listen to him. planners need to desert the FPA until they stop their professional partner program. that's why I left. just do the additional study to register with the TPB directly, it's not hard, and you won't have to be beholden to any association.

what are you all waiting for ? more advocacy from the FPA on your behalf, you know it's going to be detrimental to you, your staff, and your clients right?

so this July, show make sure you do not renew your membership. the only thing that they understand is a pay cut. give them one.

best,
v.Smart FP

Self licensing doesn't stop advisers pushing product. Nor does a ban on commissions. Self licensed, fee for service advisers can quite easily push their own internally managed product. It's what accountants do all the time with SMSFs. And it puts a lot of consumers in a much worse position.

Bit of hide given the cash payments recieved from large product manufacturers. How about they clean up their own act and then suggest we be free of conflicts.

Just use the self employed solicitor, dentist or doctor etc model. They all seem to work OK. Whats the damn problem?

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