The FPA has told the Productivity Commission that financial advisers should more explicitly disclose relevant ownership and licensing information to consumers.
In its submission to the PC’s inquiry into competition in the financial system, the FPA supported the recommendation that ASIC maintain a database of relationships between parent companies and subsidiaries in the financial system.
However, the association also went further, urging that the PC recommendation be extended to the financial advice market.
“This recommendation should also be expanded to require better disclosure by authorised representatives, to state the parent company under which they are licenced (sic) in client communication, including on websites and in emails, in a clear, accessible and visible manner (i.e. not hidden),” said the submission, which was signed off by FPA policy manager Heather McEvoy.
At the same time, the association reiterated its longstanding position that “financial planners should behave professionally and in the same way regardless of ownership structures”, but conceded that all advisers should be given the same opportunity to meet their best interests duty and advise on all products.
A significant number of FPA members are licensed by organisations that are owned by major institutions but maintain separate branding and messaging from the parent company.
Currently, financial advisers are only required to disclose the owner of their licensee in a financial services guide and on ASIC’s register of financial advisers.
The association also rejected the PC recommendation to extend the regulatory sandbox for fintech companies, saying that “innovation” does not always result in more favourable consumer outcomes.
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