The Financial Planning Association (FPA) has sought to offer an olive branch to licensees over its adviser registration proposals, with chief executive, Dante De Gori, arguing licensees will continue to play “a crucial role in developing, training, educating, and supporting licensed financial planners”.
Confronted by push-back by six key licensee chief executives about the FPA’s proposals for adviser registration to supplant authorisation under an Australian Financial Services License, De Gori sought to emphasise that it was early days and all part of a five-year plan.
The six licensees had questioned the FPA’s proposed approach and its ultimate impact on client best interests, noting the high cost of professional indemnity insurance, the importance of regulatory compliance and the necessity of continuing professional development.
“The FPA Policy Platform has 19 critical recommendations for reform that are aimed at reducing regulatory duplication for financial planning professionals, lowering the cost of advice and helping more Australians access advice,” De Gori said.
“One of our policy positions is that the future regulation of financial advice should occur through individual registration and oversight, rather than an AFSL system. This has triggered important discussions among the industry as we work together to create a better operating environment for financial planners and their clients.
“Individual registration is an innovative concept for financial planning but not for other professions. It should not be confused with self-licensing or individual licencing under the existing AFSL system, which would still result in a duplication of regulation and unnecessary costs for financial planners.
“The FPA acknowledges that licensees continue to play a crucial role in developing, training, educating, and supporting licensed financial planners.”
De Gori said licensees would continue to be needed to provide business development services, technology, education and many other services that give value to financial planning practices.
“Removing the AFSL requirement for financial planners won’t change this,” he said.
“The AFSL does not make the planner, just as the hospital does not make the doctor, nor the law firm the lawyer. Individual financial planners are the ones who provide financial advice and the regulatory system should focus directly on their professional qualifications and behaviour.
“The FPA looks forward to more discussion of its five-year strategy and working with industry and government stakeholders to identify innovative ways of improving the profession for all financial planners and their clients.”