In its submission to the PC’s inquiry into competition in the financial system, the FPA supported the recommendation that ASIC maintain a database of relationships between parent companies and subsidiaries in the financial system.
However, the association also went further, urging that the PC recommendation be extended to the financial advice market.
“This recommendation should also be expanded to require better disclosure by authorised representatives, to state the parent company under which they are licenced (sic) in client communication, including on websites and in emails, in a clear, accessible and visible manner (i.e. not hidden),” said the submission, which was signed off by FPA policy manager Heather McEvoy.
At the same time, the association reiterated its longstanding position that “financial planners should behave professionally and in the same way regardless of ownership structures”, but conceded that all advisers should be given the same opportunity to meet their best interests duty and advise on all products.
A significant number of FPA members are licensed by organisations that are owned by major institutions but maintain separate branding and messaging from the parent company.
Currently, financial advisers are only required to disclose the owner of their licensee in a financial services guide and on ASIC’s register of financial advisers.
The association also rejected the PC recommendation to extend the regulatory sandbox for fintech companies, saying that “innovation” does not always result in more favourable consumer outcomes.
Would this be the same as the FPA disclosing its funding by the FSC members their why they only act withing the best interests of the FSC members instead of customers and advisers or the disclosure on training organisations? The FPA have become a corrupt rogue organisation.
Disclosure Disclosure Disclosure- that’s the FPA mantra. Why not address the elephant in the room first and get rid of vertical integration? Next they will be mandating adviser to disclose the colour of their underpants on a register.
So much emotion! Surely any brand conscious and high quality AFSL would already be demanding this of those they authorise.
FPA who? I’ve been a CFP member for a number of years but won’t be shortly, as I can’t stand the hypocrisy from a group that entirely looks after their own interests first and foremost.
Hang on isn’t the FPA owned by Commonwealth Financial Planning? After all dosen’t CFP stand for Commonwealth Financial Planning. Given firms like NAB & CBA made it compulsory to join the FPA or AFA I thought the FPA was just for Bank advisers and their 10% discount on members fees? Like I’m really really confused to what they are trying to say here. I guess when you get most of your funding from firms like CBA & NAB and call it members fees it’s hard to tell what message they are communicating. I’m so so confused…geez… now I know how Treasury and FASEA must feel. I must be confused because in 20 years of being an FPA member I’ve never heard them come out and say something like this. I wonder what’s changed…. FASEA?
It may be the RC enforces the basic laws and then there is no means of avoiding true disclosure. To those who do not presently disclose fully–maybe you are[b] embarrassed[/b] to do so. Can’t blame you given all the sad news.
David your message is good but for the stuff up about the role of the RC – by which I assume you mean Royal Commission and not Roman Catholic – surely its role is to research and recommend not to enforce.
There are only two ways to solve the problem of vertical integration in financial advice. Either ban it altogether, or force the advice company to operate solely under the product company’s brand name.
‘[i]operate solely under the product company’s brand name'[/i] I could wear that for employed channels, but perhaps allowing self employed practices to continue to use their own names, but requiring some greater truth in the naming of Licensee, and requiring more prominent exposure would be a more balanced solution.
Well said particularly if ownership is more than 50%. I was an AR for two bank owned AFSL and they purposely prohibited email communications from other platforms to make the home team look better. Brainwashing they call it.
I would go one step further and use laws that exists to expose SHAM Contracting, whereby the advisers are told that they are independent for tax purposes but must use the system, product, processes of their licencee. Are they by definition an employee ? Vertical integration has presented conflicts in this industry. Its time these idiots in decision making land understood this simple fact. The casualty here is the consumer and their family. Long after these nitwits have left the industry, their legacy is a disaster. FPA AFA, ISN, AMP, CBA, WBC, NAB many others condoning this and the fools in Labor Liberal parties are a joke and provide NO confidence as they don’t know what the hell they are doing.
Sorry. You lost me on that one. You just made every franchisee in every industry an employee of head office??
Extend the regulatory sandbox for fintech companies ? No idea what that means but please don’t make the mistake that all fintechs are focused on the common good and therefore deserve regulatory exemptions. Like other techs they are in the business of disrupting markets to make money. Finding loopholes to avoid legislation is part of their competitive advantage they are looking to exploit.
Google most AMP owned advice businesses and disclosure is non existent or depending on the practice buried deep somewhere on page 20 of an AMP heavily subsidized website. With subsidized social media advertising an AMP business can top Google search rankings. Given legislative changes benefiting these firms such as Opt in and surrounding the use of the term “non-institutionally owned” and the like… improvement in advertising is very much warranted.
mmmm AMP owns the license, not the practices. But i don’t disagree with your point .
To some degree AMP FP is actually better than many others, at least the client has a hope of knowing that AMP the product manufacturer is involved. On the face of it, without reading the (very) fine print, how does Mr client have a hope of deciphering the ownership Millennium3, Hillross, Count or Lonsdale???
and perhaps associations and political parties could disclose any financially beneficial associations they may have on their websites to complete the disclosure loop.
Agree the FPA should put out a statement with EVERY statement saying it was approved by their puppet masters…indirectly via the professional partner program.
What a blast from the past – refreshingly so! I recall that Licensees had to disclose their ownership in font greater and more prominent than the business name. That mysteriously was canned and without fanfare.
I welcome the dialogue of its re-introduction. ASIC wouldn’t even have to employ lawyers to draft the legislation, as it was in legislation 20 years ago.
Lol. True that.
We shall disclose everything in big BOLD print…and would you like some advice with that disclosure document?