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FPA, AFA voice concerns over adviser standards draft

Industry associations have generally welcomed the government's draft bill to lift adviser standards, but have also raised concerns about parts of the proposed timeline and the new code of ethics.

According to the draft legislation released last week, the transition pathway for existing advisers will begin in 2017, with a 2019 deadline. Advisers without a degree or equivalent will have two years to complete any further study as well as pass an exam.

However, FPA chief executive Mark Rantall said that time limit is not "workable".

He added that the proposal for advisers to sign up to a code of ethics without having to do so as part of a professional body could create a conflict.

"That would create an inherent unworkable conflict for planners as they would be required to follow the code at the same time as sanctioning themselves for any breaches," Mr Rantall said.

"The FPA has data that proves financial planners who are not subject to a professional framework through membership of a professional body are 90 times more likely to be involved in ASIC banning and enforcement action."

Meanwhile, the AFA said the draft legislation will only be open for public consultation until 4 January 2016, which is not long enough.


"We are concerned about the timeframe in which the government is seeking valuable feedback from the AFA and other key stakeholders and will express this concern to the government," said AFA chief executive Brad Fox.

Both groups hope the independent body that will lay down the details for transitional arrangements by 2017 will recognise their qualification offerings as degree equivalents.

These include the AFA's Fellow Chartered Financial Practitioner (FChFP) and the FPA's Certified Financial Planner (CFP) titles.

"The meaning of 'equivalent qualification' also needs to be clarified to include professional qualifications such as the CFP designation," Mr Rantall said.

"The FPA will be advocating for appropriate recognition of our members who have completed higher levels of training and qualifications than those required by the law."