Kelly O’Dwyer announced yesterday that the adviser education reforms will be introduced into Parliament this year. She said an independent standards body will be established to co-ordinate the adviser exam, develop a code of ethics and determine education requirements.
That body will initially be funded by the Big Four banks and AMP, Ms O’Dwyer has said.
Speaking to ifa in response to adviser concerns regarding a potential conflict of interest, the Minister said, “The government believes regulatory costs should be met by those that create the need for regulation…”
“The benefit of obtaining initial funding from the large banks and AMP is that the body can start work on lifting professional standards without having to wait for the establishment of an ongoing funding model,” Ms O’Dwyer said.
“The standards body will be independent and will have strict governance arrangements set out in legislation and the company’s constitution.”
Ms O’Dwyer said that once the standards body is operational, the government will take steps to develop an ongoing industry funding model for the body and look to have this model implemented as soon as practicable.
AFA chief executive Brad Fox also soothed adviser concerns, telling ifa he will seek “absolute certainty that this will not give those institutions an unfair advantage in contributing to the standards or the directors that will be appointed to the professional standards body”.
Meanwhile, FPA head of policy and government relations Ben Marshan said that the strong mix of industry representatives, consumer representatives, an educator, an ethicist and an independent chairperson sitting on the board should provide protection to the standard setting body from any bank influence.
“While [the banks] are providing the funding, the makeup of the board is set by legislation and board members are appointed by the Minister,” he said. “[The banks] won’t have any direct say or control or influence on the board despite the fact that they are funding the board.”
He added, “From the conversation that we have had with the Minister’s office, we understand that this initial funding is to get it off the ground and once the body is set up and operating there will be a consultation process to agree to long term funding.
“We have concerns about that including ongoing funding in the context of changes to ASIC’s funding model and the fact that there are costs associated with complying with this new framework.
“We want to make sure that the funding model is right for our members and for financial planners more broadly.”
The Minister for Financial Institutions and FSC strikes again. Yes please go and work for a Bank directly
Good comment about “I pay tax and don’t get to say how it’s spent…” etc as it’s precisely at the heart of the problem of this government and many others, that fall over backwards to address the conservative agenda. Taxes should be “blind” to spending until an election, but conservatives think they should pay only for what they want… The other comment I’d like to address is that “you have to remain a member of a professional association” – you don’t. I have my own AFSL and have never joined the FPA or any other association because NONE address our needs – and in any event I am an independent thinker – often way ahead of the associations that are weighed down by the dross. My clients appreciate that I refuse to pay to play that game of being “professional” and instead I lead the way on major issues such as independence, fee-for-service, not just managing conflicts of interest but removing them entirely, etc. How many members of professional associations went to jail or have been banned?…Almost all who have been censured were, other than the outright fraudsters. Advice is only that when it unconnected from product purchase. Much of what we do SHOULD be about getting people to NOT do stuff. That’s what I spend more than 50% of my time on – stopping them making mistakes and in the meantime doing nothing until they know what (they want) to do. Teaching people how to DIY is the next phase of this career that tries to be a profession but remains an industry.
I see two issues with this proposal, Firstly we are not a unified profession, we do not have a peak body that can represent ALL of the interests of the Adviser community, We need to be united and then this action by the Government would not be required as we would fall under a single code of professional conduct that meets the standards set. Secondly I feel that the large institutions should pay and continue to pay for this initiative, think of the small business owner who will have to pay for the charges of this new regulatory body, and must remain a member of a professional association and must pay additional charges such as the TPB for their TASA accreditation. Advisers will be soon be levied out of business.
The Minister for Financial Institutions and FSC strikes again.
O’Dwyer, please go back and work directly for the banks.
Oh hang on, you are still working directly for the banks but just pretend to be working for the government.
I pay tax and don’t get to say how it is spent, why would the banks get a say?
For that matter why give the FPA a say, they are but a psuedo education providers that will as it always has done misrepresent it’s designation as a qualification and put down the quality of all others.
Just another look inside the industry that works on self interest..