On Friday, the Morrison government announced that it is accelerating the establishment of a new disciplinary system and single disciplinary body for financial advisers, as recommended by the royal commission.
The government will work towards establishing the new body in early 2021, subject to the passage of legislation that will be introduced into the Parliament next year.
A long-term sustainable solution based on commissioner Kenneth Hayne’s recommendations will replace the role of code monitoring bodies, which were due to be established by industry associations under professional standards reforms.
Following the government’s announcement, the FPA wrote to members informing them that it has withdrawn from code monitoring following concerns about member cost and compliance duplication
“Despite receiving conditional in-principle approval from ASIC, the FPA has made the decision to withdraw the application for Code Monitoring Australia (CMA),” FPA chief executive Dante De Gori said.
The FPA had been working on a joint initiative with five other professional associations to establish CMA. Following 18 months of development, a final application was lodged with ASIC on 16 August 2019 for CMA to become an approved code monitoring scheme for the FASEA Code of Ethics.
“The driving force behind CMA was our strong belief that it’s in the best interests of the profession and consumers to have one compliance scheme run by financial planners for financial planners, rather than a commercial provider,” Mr De Gori said.
“However following recent discussions, the government has now confirmed that it will progress a single disciplinary body as recommended by commissioner Hayne in the financial services royal commission in place of code monitoring.
“Given this, we do not think that it is prudent to establish CMA as a new monitoring scheme that will be superseded within a short period, resulting in a duplication of costs and compliance obligations for our members and the financial planning profession broadly.
“Though we are extremely disappointed that code monitoring will not proceed with CMA, we continue to strongly support the introduction of a comprehensive, compulsory Code of Ethics for financial planners to ensure consumer protection.”
The AFA also informed its members that it was important to avoid uncertainty and unnecessary duplication of costs.
“Financial advisers and their clients have been subjected to enormous demands and uncertainty. We need to avoid adding complexity, further duplication and cost to the regulation of financial advice,” AFA CEO Phil Kewin said.
“The AFA continues to have concerns about the current wording of the FASEA Code of Ethics as it stands, and has voiced those concerns to both FASEA and the government. We are expecting further guidance from FASEA in this regard.”
While the FPA and AFA expressed their disappointment, AIOFP executive director Peter Johnston praised the decision, telling ifa that the association never attempted to be a code monitoring body.
“Our board thought the AIOFP should be acting in the best interests of members and their clients at all times. The royal commission debacle over Sam Henderson clearly demonstrated that associations are not equipped to become a code monitoring body. It was embarrassing,” Mr Johnston said.
[quote=Martin White]Good Riddance to both institutions I say – they are weak and as useful as t**ts on a bull and did nothing for advisers over the past 5 years of never-ending change and regulation and re-regulation of previous regulation![/quote][quote=Martin White]Good Riddance to both institutions I say – they are weak and as useful as t**ts on a bull and did nothing for advisers over the past 5 years of never-ending change and regulation and re-regulation of previous regulation![/quote]
there is repeated comments on here from advisers bagging FPA/FSC. I have contributed to several of their working groups, on AML, complaints and couple of others. I have found them professional and consultative, and essentially what the members of the working group submit, is gets submitted to Government. For example, ASIC is trying to bring down complaints handling time from 45 days to 30 days because of some BS report ASIC asked some research organisation to muster up. Everyone is doing their best to push back on it. I just wonder if the bagging of FPA/FSC because they didnt ‘win’ against all the legislative changes over the last 5 years (although someone did with FOFA because it was watered down a lot by Liberals). Was any organisation strong enough to push against community and media sentiment? I doubt it. Yes they dont have the ruthlessness of the USA Lobby groups, but If you can do better, why dont you get all planner mates together and put together your own lobby group? because its a sh&t load of work and its easier playing the victim i reckon
[quote=Anonymous][quote=Time to go Dante]So what exactly are FPA members getting for their money these days? [/quote][quote=Time to go Dante]So what exactly are FPA members getting for their money these days? [/quote]
Over regulation, red tape, FASEA, LIF, Annual Opt in, Annual FDS, a Royal Commission, falling business valuations, an inability to find staff because they need a Bachelors Degree and a Grad Dip which is basically a Masters. When you do find staff you’ll have check their log book, falling business valuations, inability for ordinary Australians to obtain advice, increased dealer groups fees, PI Insurers leaving the market, PI insurance costs rising cause there are only two providers. a FASEA exam, rising costs of advice. The CFP brand ruined because of Sam H and Dante show,…lack of planners in regional locations cause regional Uni’s don’t offer planning degrees… I could go on but Dante is still….yes still…. CEO of the FPA. [/quote][quote=Anonymous][quote=Time to go Dante]So what exactly are FPA members getting for their money these days? [/quote][quote=Time to go Dante]So what exactly are FPA members getting for their money these days? [/quote]
I dont think CFP every had much cred. nothing much wrong with education standards increasing as too many planners are under educated. Though all other issues are real, and with Commissions removed (wealth) and comms reduced for insurance, matched with rising red tape (compliance costs), education, no new entrant professionals will enter the market and the existing ones will fade away within the next 5 years as there is no more money to be made. WHAT will the industry look like in 5 years? interesting to see, but im future proofing with unrelated studies as a back up plan. All those overpaid, under experienced remediation checkers will also be on the street within a couple of years…
[quote=Time to go Dante]So what exactly are FPA members getting for their money these days? [/quote][quote=Time to go Dante]So what exactly are FPA members getting for their money these days? [/quote]
Over regulation, red tape, FASEA, LIF, Annual Opt in, Annual FDS, a Royal Commission, falling business valuations, an inability to find staff because they need a Bachelors Degree and a Grad Dip which is basically a Masters. When you do find staff you’ll have check their log book, falling business valuations, inability for ordinary Australians to obtain advice, increased dealer groups fees, PI Insurers leaving the market, PI insurance costs rising cause there are only two providers. a FASEA exam, rising costs of advice. The CFP brand ruined because of Sam H and Dante show,…lack of planners in regional locations cause regional Uni’s don’t offer planning degrees… I could go on but Dante is still….yes still…. CEO of the FPA.
[quote=Time to go Dante]So what exactly are FPA members getting for their money these days? [/quote]
Sweet F… A…
Yup, that is why I am retiring shortly..
So what exactly are FPA members getting for their money these days?
like playing “Check.. Raise” strategy in Poker. Can’t wait until I see more fees to pay to run these fat cat organisations
Good Riddance to both institutions I say – they are weak and as useful as t**ts on a bull and did nothing for advisers over the past 5 years of never-ending change and regulation and re-regulation of previous regulation!
Rumors coming out of the Shadow Minister for Finance Office indicated that this body will be headed up by the Fair Work Commissioner that appeared in the Royal Commission in the Sam Henderson, Dante De Gori matter. Other panel members will be several staffers from Choice Magazine, ( the ones that spearheaded Optin & FoFA), a dash of ex Union officials and a contingent representing Industry Super Funds that frankly don’t see the value of advice and or the need for Risk Advisers. Congratulations to everyone on this exciting direction of Government regulation. P.S I told you so. Self regulation who needs it hey.
The question is will Financial Planners ask the question of the FPA why we lost yet another opportunity to “self regulate”…. If Financial Planners don’t ask “WHY or RESIGN” then I say financial planners deserve every little bit of over regulation, red tape, compliance, devalued businesses, stress they get. Will not more regulation come when Labor gets?
The Royal Commission after the appearance of Dante De Gori and the Sam H affair stated that the FPA was not capable of self regulation. Hence the Government is now following the RC’s recommendation in full. Dante is still CEO and Planners will & said nothing. This lack to self regulate, to not ask the question, the lethargy of planners to do nothing is surely disgusting given the role they have to place in Australia’s financial services system. Had Dante stepped down we’d be self regulating among peers now. The alternative is now more regulation and a panel put together by Choice Magazine, headed up by Bill Shorten and the Labor Movement.
Look forward to the day when we can all go back to solely focus on the running of our practices and advising our clients without our attention being drawn to fluid policy changes from a weak Government. I love a good challenge and am pretty good at adapting to change, but the constant moving of the goal posts and hoop jumping is making the game harder to play for the wrong reasons!
And after all this, the FPA are more concerned about “consumer protection” rather than representing their members (financial planners) whom pay their fees and salary.
Imagine the government nuffies sitting in the CMA overruling Financial Planners, when they have never worked int he industry, nor understand it, and basing their decisions on an unworkable code of ethics. There wont be a Planner left in Australia.
Agree with Peter Johnston the FPA especially are an embarrassment to watch. This is good news that the AFA and FPA will not be code monitors. They have done nothing for advisers and are basically now irrelevant.
Its official we have become 100% Government regulated industry.There is no profession and in two years there will be no advisers.A Chinese Government would be proud of the Conservatives putting in place such a autocratic advice model in such a short period of time.If anyone has completed the current ethics unit ,it will demonstrate it is not about ethics ,its about this is how FASEA will operate.No consultation,no reasonable test and no recourse.
SIgh…another brain dead bureaucracy and more fees.
Can only but agree with the AIOFP 100% on this one, it was embarrasing to watch.
Aren’t we supposed to be a member of a code monitoring body by the 15th of November? Have any actually been approved yet? How many more who put in an application will pull out passed on the government’s announcement like the FPA?
That is one way to shut down the industry – make it impossible for advisers to comply.
Looks like FPA will have to find other ways of jobs for boys. Is it even a relevant organisation post RC