The FPA has rejected the Financial Services Council’s proposed creation of a statutory advice board, labelling it a “band-aid solution”.
The FSC has proposed the introduction of an Advice Competency Standards Board to oversee educational and professional standards in the financial advice profession.
But according to the FPA, given the proposed body is industry-funded it could potentially embed inherent conflicts rather than eliminate them.
The association also said the proposal asks the government “to do the industry’s job of setting appropriate professional and educational standards”.
FPA chief executive Mark Rantall said the FSC proposal “masks underlying systemic issues” and gives up on self-regulation while creating more red tape.
“Removing the self-responsibility of advice businesses to do their best by consumers is not a solution,” said Mr Rantall.
He said the financial advice issues facing the nation require long-term, systemic change.
“This industry reform effort will require significant work on the part of individual planners and the organisations that lead and manage them. It isn’t a job for government,” he said.
Industry Super Australia is also critical of the proposal, describing it as “an embarrassing back-flip”.
ISA chair Peter Collins said the proposal is merely “window dressing”.
"Following an extraordinary lobbying campaign by the banks and financial advisers, the FOFA bill currently before the parliament gives the banks and advisers their wish-list at the expense of consumers," said Mr Collins.
"The banks now recognise they went too far and have lost the support of the Australian public. Consumer trust in the financial advice industry is now in tatters,” he said.
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