FPA head of policy and standards Ben Marshan told ifa the flagship proposal of the FPA’s five-year policy plan had come out of member feedback that dealer groups should scale back their role in adviser processes.
“For a long time the feedback from members has been that while they get a lot of help and support from their licensees, they would prefer to be more in control and responsible for the advice they provide and how they provide it to their clients,” Mr Marshan said.
“In instances where a change of licensee is required by choice or by force, [such as] a licensee closing down, having the ability to move licensees more freely is in the best interest of their clients.”
However, Mr Marshan said it would be logical under the new proposal for dealer groups to still provide important wholesale services to advisers, including bulk purchasing of PI insurance.
“A move to individual registration won’t prevent planners from operating out of a collective structure, like a dealer group, and securing PI on that basis,” he said.
Mr Marshan said the FPA was realistic in expecting the government would not make the move to self-licensing an immediate priority given its current legislative workload, but that it would make sense to consider implementing the proposal at the same time as the introduction of the new adviser disciplinary body.
“The government has already committed to setting up a body to monitor every financial planner – these costs will be borne by the industry,” he said.
“We are recommending the individual registration proposal to be accompanied by reform that focuses on individual practitioners and reduces the duplication of having AFSLs covering financial advice. Without reform, the government is just adding a duplicate layer of regulation.”
Financial services law firm The Fold Legal recently told ifa it expected the disciplinary body to be established in late 2021.
Mr Marshan also confirmed that the FPA did not expect to play an active role in maintaining the adviser register that would be associated with its self-registration policy, but would be able to share information given its experience developing the joint associations’ original code monitoring effort, Code Monitoring Australia.
“It will be an independent disciplinary body run by the government, so the FPA won’t have direct involvement,” he said.
“However, the FPA did a lot of work preparing to launch, test and revise Code Monitoring Australia. Through this process, the FPA went through a lot of iterations for how a disciplinary body can be set up, so we have the experience and information to share with the new disciplinary body.”
The amount of people that run their own AFSL and believe they are doing so in accordance with ASIC guidance lines is truly terrifying. Ask staff at the many suppliers of compliance services into this sector an they will give you stories that despite best intentions people are not operating in accordance to the nth degree of the law. Eventually when ASIC puts the same lense over this part of the industry as it has the banks, the holier than now will be eating some humble pie.
yes, The code and ethics and BID is left open to interpretation. One big mess.
I don’t understand why advisers are calling for this. Fact you can simply go out NOW and get your own AFSL and buy the services you want. The costs are lower and you get better service. Large license’s have denied this for years. The biggest stumbling block I find advisers have is 1) a fear of a visit from ASIC and 2) they don’t want to be held accountable. It’s all a bit too faced. My point you’re still going to have the similar costs and similar obligations. They somehow think individual “registration” will do away with unnecessary costs and decrease their obligations when it’s not going to happen.
Thanks Adam. At least one comment here has good sense. How do the professions of solicitors, accountants, medical, engineers and others operate? Why cannot financial planners become independent.
The proposal is not individual (AFSL) licensing, it is individual registration. It is not proposed that all of the existing (AFSL) licensing requirements would carry over to the registration process. You simply hold registration with a quasi government body, abide by code of ethics, meeting CPD requirements and hold PI.
So, how many of these advisers would survive without their AFSL and an investment team researching the products and investments for them? Opening it up will make it a free for all and is not in the clients best interests.
disagree Andrew,
Is that where you download a Lonsec report, maybe even a morningstar one too, check the investments past performance, and then add it to the APL.
Looks like the fpa is doing a trowbridge on the advisers again, it is all about money and nothing else to these bodies who call themselves associations but fail to act in the best interest of its members. Any adviser paying this mob or the afa fees is a moron, its like donating to the cancer council from a stall in a mall you know where the money is going ????
Spot on. I suspect the FPA is dying but now a last ditch effort to make the change and for them to be the only representative body , like the Law society.
Aren’t you a CFP and paying the mob?
It is Trowbridge all over again. No doubt the FPA will be angling to be the central body, same as the law society for the legal profession.
Authorised reps should get their own AFSL! They can’t expect and AFSL to simply rubber-stamp their actions, wishes and dreams. If they know what they’re doing they can get their own AFSL and try it for themselves. It’s not easy, but if you have an IQ well past median you’ll manage it – as many of us do Stop whinging and get on with it.
I am a financial adviser operating my business under a non-aligned dealer group. This spot on and can’t happen quickly enough.
What’s holding you back from getting your own AFSL? Is it the lower costs, is it the 3-9 month wait, is it a feeling to be individually accountable like a GP? Individual registration will still have obligations and you’ll find the auditor that audits the planner at your existing licensee is most likely going to be the same auditor when you get your own rego and you’ll still have an obligation to be audited. Just go out and become self licensed, stop paying for inflated prices at your existing licensee.
Now the banks (who pay the FPA the most) are exiting financial planning and have no interest in being Dealer Groups, the FPA are repositioning to financially benefit themselves in a different way.
If you don’t like the policies and prcoedures of your licensee then get your own license.
hi, rob,
we are on our way. we’ll all be getting one sooner or later. just biding our time completing the required study and exam.
we are all out the door. it’s not hard.
thank you
anon – i assume pretty much so your an Shartru Wealth Mgt AR – your own advisers are telling you Rob.
they are leaving. SWM.
Rob, a little bit of deja vu.
I remember the Merton saying exactly the same thing twenty years ago!
that comment might come back and bite your bum.
You mean you outsource your policy and procedures to a consultant?
yes they do
that comment might come back and bite your bum. (hears asic knocking on robs front door)