The long-speculated alliance of Australia’s major financial planning groups may occur because of the high cost of sustaining themselves as code-monitoring bodies under the new Financial Adviser Standards and Ethics Regime.
While no firm decisions have been taken, Money Management has confirmed the possibility of a joint approach to code-monitoring on the part of the Financial Planning Association (FPA), the Association of Financial Advisers (AFA) and the SMSF Association because of the high costs inherent in the expectations outlined by the Australian Securities and Investments Commission.
FPA chief executive, Dante De Gori, said his organisation was still running the numbers with respect to becoming a code-monitoring body in its own right but conceded that it looked like being a costly exercise.
He said that in these circumstances, it would be foolish to rule out becoming part of a joint approach.
SMSF Association chief executive, John Maroney, indicated a similar view on the part of his organisation, stating that there were three options – “do nothing, do it ourselves, or do it with others”.
However, like De Gori, he acknowledged the high costs associated with meeting the requirements which had been outlined.
“We haven’t made any decision at this stage, but a joint approach is possible,” Maroney said.
The AFA has filed a submission responding to the ASIC guidelines which is understood to point to the considerable logistical and financial challenges associated with maintaining code-monitoring status and the possibility of a joint approach.