International standards to get thumbs up

Thefinal draft of a set of international standards for financial planning should be ready for comment next March.

David Williams, chairman of the Standards Australia Committee for Personal Financial Planning, who will be presenting at the convention, says the document will be delivered at a meeting of members in Malaysia and will go to 18 countries, including Australia, for discussion before the final set of standards are produced. The target date is November 2005.

Work on setting an international set of standards started in April 2001, when the International Standards Organisation (ISO) convened a meeting of interested parties, Williams says.

Australia was a participant at the meeting and a local steering committee was formed subsequently to deal with submissions.

This committee is made up of a number of Australian bodies that includesCPA Australia, theFinancial Planning Association(FPA), theInvestment and Financial Services Association(IFSA), and theAssociation of Superannuation Funds of Australia(ASFA). The Australian Consumers’ Association (ACA) and theAustralian Securities and Investments Commission(ASIC) are observers.

“There is representation of every industry interest group on the committee and all are keen to get a set of standards as they can see the benefits,” Williams says.

The structure for the set of standards has been produced and has been divided into four working groups: definition, process and practice management; competencies; ethics; and experience.

“The work groups will present their drafts of the standards at a meeting of the 18 countries in Johannesburg later this month,” Williams says.

“However, there is general agreement on most points that have been raised in previous meetings.”

When the final standards are approved by the ISO, Australia will then look at how they can be implemented and what changes need to be made to legislation or representative body guidelines.

“We hope the creation of a set of Australian standards will take away the ground for unhelpful organisations that want no change,” he says.

“The standards will be able to give regulators something to check against instead of having to create benchmarks and to regulate at the same time.”

Once the Australian standards are agreed, the financial services industry can approve certifiers of the standards under the Joint Accreditation System of Australia and New Zealand (JAS-ANZ) government body.

Williams says work can also proceed with ASIC on using the standards to set regulations and influence industry practice.

“ASIC will have an independent set of standards to refer to,” he says.

“There is a need for more transparency in financial planning and the standards will help achieve this which will benefit everybody.”

Williams believes the standards will put financial planning on par with other professions. But it will be unique, as the transparency is far greater than that in other professions.

“The real challenge is for everybody to work together,” Williams says.