In its submission to Treasury’s review of the TPB, the FPA said giving financial advice had become “almost an unworkable proposition” in the last 10 years due to the imposition of layer upon layer of new regulations and the lack of communication between relevant regulators.
“Financial planners … must comply with four laws, which are then regulated by seven different regulators, subject to complaints handling and disciplinary interpretations by three different bodies, and subject to authorisation, supervision and monitoring by a licensee,” the association said.
“[Due to] the lack of consultation and agreement between all these entities on a set of minimum standards under which the provision of financial advice is able to operate under, the outcome has been a significant amount of duplication and additional cost created by this unworkable regulatory environment.”
Given this, the FPA suggested Treasury review the TPB’s regulatory framework for overlap with other relevant regulatory bodies, as well as consider a broader inquiry into regulatory duplication when it came to the provision of financial advice.
“Noting Treasury is generally responsible for most of the laws and regulators involved in regulating the conduct of financial planners, we would hope that Treasury would consider more broadly making recommendations on how to improve this situation,” the association said.
“Our overarching recommendation therefore is that Treasury recommend that the Productivity Commission, the Australian Law Reform Council, or as part of the financial services royal commission recommendation 2.3, review of measures to improve the quality of advice, consider these issues to ensure the broader regulation of financial advice providers is streamlined and there is a removal of much of the regulatory duplication and inefficiency which pervades the profession currently.”
The comments echo recent calls from the joint accounting bodies and the SMSF Association for government action around the complicated regulatory framework governing financial advice, particularly as it affects access to advice for SMSF trustees.
Announcing the intention of the three major accounting bodies to lobby the government jointly for reduced red tape for accountants wishing to provide advice, IPA chief executive Andrew Conway said the extent of the regulatory burden facing advice practitioners meant financial advice was becoming less accessible for consumers over time.
“Our shared goal is to reduce the regulatory burden for our members so we retain financial advisers in the industry. For the first time in the best part of two decades, we are at risk of creating an advice gap in the market,” Mr Conway said earlier this month.
“We have a clear focus to revisit definitions, licensing regimes, and to harmonise obligations when members operate under multiple regulatory frameworks to provide the one piece of advice.”
[quote=Mid career]
All good advisers see that the risk/return characteristics of being a licensed adviser are catastrophic.
No good adviser would recommend their clients invest most of their wealth into a financial planning businesses…!
I have advised myself to exit.
[/quote][quote=Mid career]
All good advisers see that the risk/return characteristics of being a licensed adviser are catastrophic.
No good adviser would recommend their clients invest most of their wealth into a financial planning businesses…!
I have advised myself to exit.
[/quote]You have a good adviser.
All good advisers see that the risk/return characteristics of being a licensed adviser are catastrophic.
No good adviser would recommend their clients invest most of their wealth into a financial planning businesses…!
I have advised myself to exit.
what a mess!!!!
That’s the first actual real lobbying and standing up for members’ rights that I’ve seen the FPA do in 22 years of practice. WELL DONE FPA!!!!
22 years too late!
[quote=Anonymous][quote=Anon]It’s amazing how many commenters on this site are so wrapped up in their seething hatred of the FPA, that their response to this excellent submission is to turn it into yet another FPA hate rant.[/quote]
“The biggest threat to professionalism in financial advice is actually the FPA and FPA members complicit in the behavior of the peers”
FPA and FPA members. can you handle the truth? the FPA has orchestrated their own demise.
[quote=Anon]It’s amazing how many commenters on this site are so wrapped up in their seething hatred of the FPA, that their response to this excellent submission is to turn it into yet another FPA hate rant.[/quote]
Rightly so because Treasury will read it and note that it’s 1) just cut and pasted from AMP their puppet masters and 2) from the Mob found wanting at the Royal Commission. The biggest threat to professionalism in financial advice is actually the FPA and FPA members complicit in the behavior of the peers. Behavior that was exposed at the Royal Commission. I suggest you run off and reflect on whether your subsidised membership fees, no doubt paid by someone else in bulk are really worth it .
Don’t tarnish all current/former FPA members with the same brush. I have never asked for a single dollar of any FPA fees to be paid. All have been paid from my own pocket with an income to just get by. That is why I made the decision to cancel it as I felt that I wasn’t getting value for money. My views would also apply to any other group whether they be FP/ACC groups.
It’s amazing how many commenters on this site are so wrapped up in their seething hatred of the FPA, that their response to this excellent submission is to turn it into yet another FPA hate rant.
A pity that the FPA is part of the problem. Being in bed with product providers (banks) and lobbying Labor Governments was never ever going to be a successful outcome. We’ve now got a body that was accused of not being capable of being a code monitoring body trying to put forward representations to Treasury. The best outcome for all planners is for the FPA to be wound up and we start clean.
Finally the FPA wake up when its too late as usual. They’ve been telling us each change they never fought would be workable until now.
Perhaps the FPA has finally realised that they themselves are finished too?
[quote=Mid Career]Yep, it’s crazy. I’m getting out after 10 years as a licensed adviser.
I look at the risk/return for my licensed advice business. Any financial adviser worth their salt would say that is a BAD business to be in.
A good financial adviser would recommend (to themselves) to divest that holding ! [/quote][quote=Mid Career]Yep, it’s crazy.
Yep, considering it all. exiting is the best course of action.
the joint accounting bodies (IPA, CPAA, CA ANZ), have done a cute video too. i think they are seriously deluded though.
https://www.youtube.com/watch?v=goffxXy4wP4
Stating the obvious. Nobody – and I mean nobody knows what the lie of the land is with respect to the rules applying to this industry. A ridiculous and appalling situation.
“At risk of creating an advice gap” It already exists – the data is out there.
33% of the top quintile of Households by wealth get advice.Yet less that 4% of the rest of the market gets advice.
ASIC’s own reports indicate a desire for advice but a significant disconnect between the cost of advice provision versus the consumers willingness or capacity to pay.
This creates a perfect scenario for unregulated and unqualified advice to take advantage of those that most need qualified advice. There is now a plethora of firms that look and smell like financial planners but are not regulated as such. They typically sell overpriced properties from developments to every day mums and dads or their newly minted SMSF ‘s.
The advice gap is real and it’s being taken advantage already. The regulators have themselves to blame because they have created the environment that regulated advice s forced to operate in.
Very sensible and well put by the FPA.
Yep, it’s crazy. I’m getting out after 10 years as a licensed adviser.
I look at the risk/return for my licensed advice business. Any financial adviser worth their salt would say that is a BAD business to be in.
A good financial adviser would recommend (to themselves) to divest that holding !
Bring all the “values” together under one umbrella and thus simplify the end to end process of advice and pathways to becoming and remaining a financial planner. For once I actually agree with the FPA. Look at the mess of FASEA urgently and either delay the Code of Ethics or send a definite and bankable interpretation that life insurance commissions can be accepted after 1 Jan 2020.. as it stands, that would be a conflict and so unable to be received by the adviser… although the AFSL can receive it. otherwise, I feel that we wont have much of an industry left… all too complicated and impossible to swim between the flags.