In a statement, FPA chief executive Dante De Gori said the association was calling for the AFSL system to be reformed to focus on the licensing of financial products rather than the provision of financial advice.
“While the AFSL system plays an important role in regulating financial products and services, recent reforms have focused the regulation of financial advice at the individual practitioner level,” Mr De Gori said.
“This is an appropriate approach and acknowledges the relationship between a client and their financial planner is a personal relationship, not one between an AFSL and the client. Future reforms to the regulation of financial advice should occur through the professional standards framework and rely on individual registration of financial planners.”
Mr De Gori said the AFSL system currently added unnecessary costs to the provision of advice and introduced potential conflicts between the views of the licensee and adviser.
The association said the establishment of a single disciplinary body for advisers would open the door to individual registration, and that it made sense for the body to also have responsibility over monitoring an adviser’s qualifications and exam status.
“This information should be provided by the individual financial planner and verified as correct by the single disciplinary body,” Mr De Gori said.
“In this manner, the register will become an authoritative source of information on each financial planner, including their qualifications, compliance with professional standards and disciplinary record.”
Mr De Gori said individual registration would have added benefits in obligating an adviser to take responsibility for their own qualifications and compliance with the FASEA professional standards.
“Registering with the single disciplinary body and maintaining accurate information on the register should be the individual responsibility of each financial planner, not their employer or licensee,” he said.
“Information on the register relating to a financial planner should be verified by the single disciplinary body and represent an authorised record of whether a financial planner has complied with their professional standards.”
Mr De Gori added that the association believed the current licensing system was inadequate because it focused on being licensed to provide advice around particular product types, which was not consistent with the modern direction of the advice profession.
“The regulation of financial advice is currently tied to the recommendation of a financial product, reflecting a history in which a product recommendation was the core component of most financial advice. In a professionalised financial planning sector, this is no longer the case,” he said.
“Contemporary financial planning is about a lot more than recommending financial products. There is a wide variety of topics that might be covered by financial advice and many may not include a product recommendation. Regulation of financial advice should reflect the variety of advice that can be provided, and not continue to be tied to financial product recommendations.
“Future regulation of financial advice should focus on the broad nature of contemporary financial advice and not limit its focus to financial products. The law should be changed to separate the regulation of financial products from the regulation of financial advice.”
seems to me its all gone stupid – again – well, i’m hanging up my hat up as well soon – from this stupid profession….
fight fight fight…bicker bicker bicker….how is that in the clients best interests..? BS. bye.
FPA will have another agenda. probably only saying this to keep their member numbers.
If FPA can manage to pull this off, it will be a game changer. There’s no need to pay ongoing fees, and get nothing in return. I wish FPA and the government go through with this recommendation.
This makes absolute sense and will go a long way to a healthier more professional and streamlined industry.
The financial adviser supply chain is broken.
The dealer group is integral to new entrants.
Those advisers wishing to get their own license are perfectly entitled to do so (which has always been the case).
I have managed dealer groups for twenty years, and have always congratulated an adviser who took the next step in career development and became self licensed.
Saying that somebody can go and get their own licence – but that assumes the status quo is working. It’s not.
In fact, it seems that nearly all opposition to this initiative is rooted in the assumption that dealer groups/licensees are a necessary part of a profession.
Simply put – they’re not. They never have been. They’re a distortion of a professional structure unique to financial advice.
Eliminating them will require advisers to assume responsibility for their own conduct and work. You know, like every other profession.
Bring it on.
Fine, however your public LinkedIn profile shows no FP or any other qualifications. Zero, that is. Is that correct?
I also cannot see that you are on the ASIC FAR. Likely also not eligible to sit the exam.
I would not work for any AFSL that you ‘manage’ and can’t see that your opinion here has any value at all based on a complete absence of credentials. If you do have credentials, other than ‘experience’, spell them out.
“The dealer group is integral to new entrants”.
Under the current system that’s a big part of the problem. It means new entrants can be effectively captured and coerced to sell the dealer group’s product. It’s very difficult for advisers who are uncomfortable with the conflict that involves, to break away and become self licensed. Having dealer groups as licensee is a massive power imbalance.
That’s why the FPA is proposing getting rid of licensees altogether. They’re not proposing everyone become self licensed under the current system. They’re proposing a new system where there are no licensees. There is individual adviser registration with a single government agency. No adviser, whether new entrant or experienced, could then have their professional registration used as a coercion tool by a conflicted dealer group.
why waste breath on such a concept from a meaningless organisation – self-licensing is available and has been available for those who wished to pursue it for many years. It’s no different from your local lawyer who is a jack of all trades running a small business above a takeaway shop versus the corporate lawyer who has a specialisation and their memberships & CPD paid for by an employer – they also get extra support for tricky clients and the odd PI issue.
What does it matter so long as the licensees aren’t vertically bent (not just the banks, Industry Fund Advice needs to be pulled apart). It makes sense for advisers to band together and pay experts a salary to understand crappy legislation and the unworkable FASEA code. Can’t understand their motivation – certainly not a very profitable exercise!
1.) Get rid of AFSL’s
2.) Get rid of AFA & FPA – Merge into industry monitoring, policy, compliance. All industry funded with Advisers on the board.
3.) Get rid of TPB, FASEA, any other double ups
4.) Create industry funded compensation scheme to reduce PI costs
It does concern me that there is support for this idea. What it means to me is that advisers feel that their AFSL is of no benefit to them. I can only assume they are part of an institutional AFSL or one that is only after numbers and not quality. With self-reporting of breaches to ASIC from the first of July becoming more stringent how would it work that you report yourself. It would not work. Based on the poor results of the recent FDS survey you would assume that many advisers are just hoping ASIC does not come knocking. Strong compliance driven AFSLs that aim to provide support and business growth is the way of the future. Individual advisers do not have the time to keep up with the massive amount of changes this industry is going through. My suggestion is to find an AFSL that provides a future and value for money remembering you often get what you pay for.
Being self licenced means you licence with asic directly. More chance of getting audited yes. However also more chance of asic being facilitative. More chance of getting actual direction from asic as no more middle men. Many advisers dont want marketing, dont want bdms , however pay for it anyway. Yes compliance is an issue so is product research if advising on product. However there are many compliance and research companies we could use to outsource it. Also all these different compliance areas at different dealerships do things differently. We need standardisation. Dealerships really are dinosaurs, clipping our tickets at every opportunity, telling us what to do, what product to write, how to charge clients etc. People are sick of it. If we are going to be a true profession we wont and shouldn’t need the dealership structure.
you could also just pay a compliance expert for service in this area like any other service provider to a business – we are just in the mindset of AFSLs… all are bad in a way – they are in it to make money – not serve clients.
If everyone is a member of a new Industry body (singular – merge afa & fpa) then you run all the compliance through there to standardise it all across the industry.
“AFSL system calls for abolishment of FPA” looks like a better headline…
So De Gori having had the FPA bought and paid for by the members of the Financial Services Council, most of whom ended up been mentioned in the RC. Having the puppet masters of the FPA selling out of the wealth and insurance business after throwing advisers under the bus to get a bigger pay of as their multiple of earnings grew on an EBIT basis, now with the very large banks selling of life offices , fund managers and dealer groups. its now time to sail of into the sunset by saying, don’t really need an AFSL anymore we made some good coin with this caper.. Meanwhile if you are an AFSL with a ladvisers, your business value has gone from something to nothing? Much like the advisers who have also suffered.
This industry should never have been allowed to be at the hands of banksters and their enablers like De Gori. The FPA collected fees for hurting their clients. Us mug advisers. De Gori and the other nitwits at the AFA are pathetic and not worth the membership fees. Talk about fee for no service…..give me a bloody break.
Yep, self regulation…… . . that’ll work. You’re free to self license now guys & gals. Off you go.
Agree with proviso that dealer groups provide a service to advisers if they so wish to belong to such a dealer group.It must not be compulsory..Advisers can license themselves and be responsible for the own skills and knowledge as they they are now anyway. The cost of belonging to a dealer group is an issue..we cannot afford them anylonger…They can exist only to provided a service..like compliance ..like PI etc…for which they charge a nominal fee to facilitate
From the comments it is clear there is a significant gap in how the PI insurance market operates and how risk mitigants such as supervision and monitoring,and well researched APLs keep a substantial lid on premium affordability. Those wishing for an industry wide free for all of the product universe better be prepared to pay for it. That’s if insurers would even cover it.
Should have been Ripoll’s recommendation but he didn’t have the backbone. About 10 years too late. Predicable…..with the banks fleeing the industry, the FPA has no masters to grovel to now.
Agree. Advisors need to be allowed to use their education, training and experience to provide advice to their clients, free of influence from licensees, industry associations and product providers. I want a refund of fees for no service from all the self interested groups whom I have been forced to pay money to and whom have done nothing!
The head Cockroach representing the scum of the Advice Community has spoken. The majority of FPA members don’t even pay for their memberships themselves, their product owned licensee pays for it. Funny how this statement comes out just before membership dues are being paid for. I take the departure of large institutions like NAB etc etc are hurting.
Having worked in insto land for many years I have never seen an organisation pay advisers membership fees. Sure there is bulk regos, but the AFSL claws that money back from advisers in next
brokerage run.
sounds like you are suffering from a pest infestation! RC cleaners will do a good job, ask for Ken
Conceptually very interesting. Now close your eyes and picture 18000+ advisers entering into the market and seeking to negotiate and obtain their own PI insurance cover on an individual basis, and doing so every year.
Picture 18000+ advisers attempting to keep up to date with regulatory changes and compliance changes on a weekly basis. Oh, did you think that these changes would magically stop once the new individual registration system commenced? Hmmm.
Yes, conceptually interesting – but what about some of the small details such as the examples I have mentioned above? Love to hear more details from the FPA “think-tank”!
This is a great idea. Imagine not paying 30k plus a % split a year just to be audited and get paid. For too long dealerships have controlled advisers, held us to ransom with audits and limited apls and crms that cannot be replicated, give us our freedom to operate!
While I sense a healthy dose of self-interest in this announcement, it does make sense for the industry to pursue licensing at the individual adviser level. Advisers are already legally obliged to complete FASEA exam, CPD requirements and education standards and, most importantly, comply with the Code of Ethics, so why shouldn’t they be individually licensed? If this happens advisers will finally be able to focus on their relationships with their clients rather than ticking boxes in a compliance driven culture controlled by dealer groups.
Please tell me that the FPA went to their membership base and sought their consensus before making this their position.
Bwahahahaha! Noooooo……..???
No and I just spent thousands and thousands to get my own AFSL. thanks FPA you have just lost me moving to AFA now FPA and AFA are so out of touch they might as well be on another planet
It won’t happen for several years yet. The money saved and stress avoided by getting your own AFSL will pay for itself in much less time than that!
yep great idea Dante, well said. PI better assessed individually. Bring back the strategy paper, non-product advice tailored to suit client needs. Less bullying by the AFSL who is more self interested and confusing, I would rather deal with ASIC directly.
I agree Licensees have failed time and time again to put the clients best interests first, the classic example is the approved product list why does IOOF have the vast majority of IOOF products on their APL are we really to believe out of the vast range of investment products only IOOFs are the best this goes for AMP as well
and then when you have these compliance teams telling you what is compliant or not for your clients it’s a joke I actually asked some basic questions about my client to the compliance officer who was giving me a hard time about an SOA and he couldn’t even answer some simple questions about the client so how can they know what’s best for the client when they don’t even know the client.
Licensees are just an unnecessary cost to planners and they provide ZERO benefit to the planner or Clients in fact they add to the cost to the advice you provide to the client so they actually make the clients worse off
Abolish licensees have a central body that fulfil the function Of qualification, FASEA exam and CPD verification.
Accounting firms that are Tax agents still have the requirement for PI but yet they don’t need a license to provide this for them so why can’t we do that as well
Essentially there is no need for licensees anymore ABOLISH THEM
I believe IOOF is the largest client of both CFS and BT Wrap. And would be close to one of the largest for MLC and Macquarie platforms. I think your comments are based on your perception, but not close to the actual reality.
I agree that the product providers and products should be regulated in which case advisers could have significant red tape abolished and ASIC could concentrate on regulating a few rather than the many. This would certainly cut down on many (but not all) of the services provided by dealer groups and the costs we pay.
It would also make the point of the FPA even more irrelevant and the useless cost of being a member.
[quote=Anon]Finally FPA have proposed something that makes sense, but they should go further. They should also ban any ownership between financial advisers and product providers. If there are no ownership links between financial advisers and the products, then advisers will be free to recommend what they think is best not what their licensee tells them to recommend.
[/quote]
Totally Agree
Hmmmm Cannot help but feel uneasy about anything the FPA suggests. Need to follow the money trail here I think.
PI Insurance is the challenge. I have investigated self licence for my single adviser practice and the indicative PI was prohibitive. Perhaps Dealer Groups, rather than being the licensee, should become a wholesale service provider to licenced advisers and arrange group buying for software, PI, legal work for standard documents (eg FSG) and perhaps para-planning etc. The brilliance of the idea is that its immediate effect would be to eliminate vertical integration and remove product providers from the professional advice space once and for all.
I don’t think your maths are right Patrick. PI Insurance is quite high. As an example I pay $22,000 a year for two planners but when you subtract licensing costs, my costs fell to a point where I was able to put on a part time admin person. I outsource compliance and pay for it and I get better support. Overall my costs are lower. My experience is the majority of planners say they “don’t want to take the risk” . I think that statement in itself sums up this industry. The only Advisers that should be licensed by someone else are new planners, those working for a product manufacturer (call centre/sup fund) and those going to retire in the next five years.
Pretty much exactly what Dover was doing before the people they embarrssed got them wiped out. People from “real” older profrssions (like Accountants, Licensed Land Surveyors etc ) already knew this was how it should be. ***** I was Licensed Surveyor from 1968 and switched to Financial Advice with the first of the qualifications (Australian Certified Investment Adviser) in 1986. Saw all the disasters, joined Dover in 2010 and sold and “retired” in 2013. Still watching ?
Hi Patyrick
Your wholesale service provider seems to make sense in theory until you realise that you can outsource the function, but not the liability.
I can understand about group purchases for software and possibly even compliance.
However, with regard to the PI policies, when the licensed entity ceases to be the “insured” and merely acts as a quasi arranger/broker for the individual adviser do you not think that PI insurers will insist upon individual underwriting of individual adviser risks based on past compliance history. It happens to some limited extent now with licensees, but it would become the basis of every policy in the future. That would need to occur for 18,000+ new insureds on an annual basis. What about minimum levels of cover – currently $2 million minimum for the smallest licensees. How much do you think that ASIC would drop that minimum cover for if it went from each licensees to each adviser in the current pro-consumer environment?
It would be difficult to see how this would work.
If you talk of economies of scale with pi , taking out the individual underwriting issue, wouldnt one big entity negotiating on behalf of all advisers get more scale than 200 dealerships negotiating seperately?
The more Advisers can shed themselves of the “hangers-on” the better. The costs of being licensed are ridiculous, plus its inefficient and creates a compliance culture, where the compliance isnt to the benefit of the consumer, but to protect the AFSL.
If there were a uniform industry funded structure, then everything can be streamlined.
some common sense a long time coming from the FPA.
This is a really good idea. Ask ourselves the value that dealer groups provide. It seems limited to me. We have so many layers of beaurocracy that inhibit the service that advisers provide to clients – so many noses in the trough –
adding hugely to the cost of providing advice. A move to chop out layers and focus fully on the adviser/client relationship has the potential to simplify/streamline and reduce cost.
Also if the dealer group gets into strife, the problems and solutions filter across all advisers. Note IOOF group forcing all their advisers to move to 12 month contracts when it hasn’t been legislated as yet.
Prior to announcing this, should have been this announcement. “Effective the 1st July 2020, the FPA will be ceasing the Professional Partner Program”.
Only then will this article have some direction and the FPA will have purpose.
These are the discussions to have, so on that basis,the FPA needs to be congratulated for putting this forward.
That won’t happen. The only way for the FPA to get that message is to resign.
Individual Rep numbers are sufficient in a professional association.
Accountants don’t have a licensee.
Solicitors don’t have a licensee.
Doctors don’t require a licensee.
Engineers don’t have a licensee.
They do something wrong, they get reported, they answer to their association.
This change can’t come fast enough. Its the only way to unbuckle ourselves from APL’s and all other restraints the Licensee’s use to make advisers favour their own products.
I am an accountant and I need a practising certificate from the CAANZ if I went into public practice so it may not be a license but it still has all the features of CPD, quals etc. So you are right.
More importantly, all those on the Boards of the professional bodies AMA (doctors), law society, CAANZ, are qualified in the same profession so know how to represent their interests and command the loyalty of their members. Whereas we seems to have a bunch of jokers sitting on the FPA, AFA , FASEA Boards, few if any are qualified as advisers and thus could care less about the effect their decisions had on advisers.
Six of the eight FPA board members are practising financial planners. The other two are independent of the financial planning sector, as is good practice for boards.
These are the best and most interesting comments I have yet seen on an IFA article. Really good and informative.
I agree with the FPA. This is the way forward. Licensees can become service providers and perhaps become profitable again – currently I can’t see a profitable working licensee model that will survive an ASIC audit. The FPA could become the equivalent of The Law Society or CPA Australia. It is already transitioning to that and its CFP could morph into the Law Society equivalent of being a legal specialist.
This will also allow us to transition to a profession, should we be interested in doing so.
… or the FPA can disapear and we get a proper body instead.
That’s EXACTLY what the FPA is angling for; to be an indispensable part of the industry because presently advisers are starting to find out that they DO NOT need to be a member of an association IF their TPB registration was NOT BASED ON PATHWAY 304.
Makes so much sense it’s almost scary. We remove a whole unnecessary layer of regulation and red tape, advisers take ownership of their own professional conduct and development, and the dealer groups…. Well I reckon they heave a big sigh of relief. There’s still plenty for them to do. They can start focusing on helping advisers grow their businesses with a massive weight of liability removed. No more spending half their lives (and practically all their profit) being ASIC’s sherriff’s deputies. Sure advisers have to buy their own PI in this world, but they’re priced on their own individual risk. Won’t be easy but I say bring it on.
Why would you bother with a licensee at all. All software, revenue collection and whatever else they do can be outsourced individually. No more clipping the ticket and adding the the cost of advice.
Finally FPA have proposed something that makes sense, but they should go further. They should also ban any ownership between financial advisers and product providers. If there are no ownership links between financial advisers and the products, then advisers will be free to recommend what they think is best not what their licensee tells them to recommend.
If they do this they could get rid of much of the red tape and ASIC could spend their time chasing real misdeeds and not trying to catch advisers that overlooked a bit of paperwork.
Re investments, advisers could charge either a fee for service or asset based fee.
Re insurance, advisers could charge a fee for service or take a commission.
Would this mean PI insurance is the responsibility of each individual planner? My concern about this is that PI may be difficult to obtain for many advisers. While an AFSL may receive cover if a small number of advisers have received a formal complaint or compliance breach, I can see PI insurers refusing cover individuals for any hint of a potential claim. In this scenario, the cost of PI may become out of reach for an individual adviser. Either way the adviser is out of business.
This is exactly what would happen. There is a steady flow of planners leaving the Self Licensed model at the moment and jumping back to an AFSL group as PI has become affordable or unattainable.
You sound like you work for a dealer group. I’m a single adviser AFSL and my PI is only a couple of hundred dollars more than when i was with a big dealer group so i’d be interested to hear where you are getting your stats from.
The numbers don’t actually support this. Adviser Ratings, in their quest for relevance, tried to push this narrative. But it was content, not information.
Have an industry funded compensation scheme too?
So how do we make money now advisers realise we are a waste of an industry body, lets become the mega AFSL but call it something else, yep that way we get our money back- clearly, the FPA is run by fools
The FPA is spot on. Using Regtech, ASIC can do a better job in spotting issues than rely on AFSLs to do their job. I think a lot of AFSLs are basically not going to be around for too much longer because of the size of the liability vs return.
Yes Finally!! AFSL structure does not work full stop.
Fantastic! Good call Dante and about time. Licencees are so completely unnecessary and always have been!
Great to hear FPA is proposing this. However the FPA should also practice what they preach, and make sure every FPA member is individually renewed and invoiced. The FPA’s current approach of allowing large licensees to do bulk, discounted, renewals for its representatives creates the impression FPA is beholden to the big institutions. It consequently undermines their lobbying effectiveness.
Time to get rid of this perceived conflict, and practice what you preach FPA.
So the FPA is professing severance from its old masters, the institutional AFSLs. Judging by advisor polls, they are suffering severe relevance deprivation. As a former single adviser risk AFSL, self-licencing holds promise, providing PI & Auditing coasts are not onerous, and there is a pure risk adviser category without the FASEA educational rubbish
The work that AFSLs do will still need to be done by Dante’s proposed central body – which chances are will be another fat bearaucracy (a bit like FASEA orASIC who get paid but fat bonuses for an organisation that is not supported to be profit driven) now and out their fees up willie-nilly. At least my AFSL will back me if I haven’t done the wrong thing when ASIC goes on a witch-hunt because ASIC’s be rapped in the knuckles by Royal Commissioner.
No thank you.
Keep the AFSLs and get rid of the associations who pay their CEOs half a million dollars annually and said association(s) rollover when there was a suggestion to ban grandfathered investment commissions and insurances commissions. When these ineffective associations ask “How high?”, when a misguided Royal Commission (for BANKING misconduct lets the bank off Scott free and stays from his remit to target commissions of advisers and mortgage brokers) says “jump”.
The only reason advisers are still part of the FPA is because they are ransomed to do so to keep their CFP designation (which is worth squat to FASEA) EITHER THAT OR advisers do not realise they DO NOT need an association membership if their registration with the TPB was not via pathway 304 (membership with an association for 6 years or more).
So Dante you’re right, our industry does need an overhaul when ASIC can put adviser fees up by 25% willie-nilly but salaried bearaucrats left, right and centre yet tell us (self employed advisers) the cap on the maximum commission we can be paid in the year we do the work (rather than letting free market forces between a willing buyer and seller determine that) PLUS we run the risk of having that commission clawed back up to two years later.
There HAS TO BE A BETTER WAY!
The FPA’s proposed central body may well be a fat bureuacracy, but it will be the ONLY fat bureaucracy overseeing advisers. The proposal is to replace ASIC, TPB, FASEA, licensees etc, with one adviser regulatory body. Surely that is a much better way?
And when the fat bureaucracy decides that it needs scalps to hang on the trophy wall to “prove their worth”, there will be no good AFSLs to back the adviser.
Sure by all means amalgamate ASIC, TPB and FASEA because right now it sure doesn’t feel like any of them care for me as an adviser like my AFSL.
“Good AFSLs to back the adviser”? You have got to be kidding! Most AFSLs are all too willing to throw advisers under the bus if the adviser doesn’t write enough inhouse product, or the AFSL is feeling regulatory heat themselves.
As much as I hate dealer groups and I want to support this, it is a very dangerous call considering the FASEA Code of Insanity. If licensees are disbanded, we will still be subjected to annual audits, but it will be the disciplinary body doing them, rather an a licensee. If they conduct audits based on a strict, legal interpretation of the code, it will be total chaos. Aside from that, if the disciplinary body employs hundreds of auditors, it will be a costly exercise and guess who will be paying for them? We will also need to find our own PI insurance as well, which could be a serious challenge. So I’m not convinced about the cost saving argument. Dante should focus on fixing the code and he should be using every resource available to lobby and fight FASEA on this. The Code of Stupidity is the biggest threat to our profession. Fix that, and then we can start talking about other things.
Sounds like a great idea
I think the direction is worth debating. The potential journey has to be mapped out better. This is at least a 5 to 7 year time frame( but time goes quickly). There does not to be some serious thought about this transition as technology can be an enabler but it isn’t quite there yet. As an industry we do need to work together . As Andrew Inwood talked about yesterday, there will be still Advice Networks where “tribes” will exist but the licensee aspects which are currently compliance , authorization , revenue collection and cpd can be commoditised and provided by outsourced providers. The discussion and debate needs to happen. It is one of a number of potential scenarios worth debating.
Hallelujah
I agree very much with FPA on this issue. Most of the big guys have left the industry but we are still working in the same structure as it was with the big guys. Small adviser entities have to either join a dealergroup or run their own licences. Either way is very expensive and I don’t see much value-added for the money advisers pay. This only adds to the cost of advice and the layers of burden of work because the dealergroups are each trying to set their own rules and APL. Contradicting and biased APLs are everywhere. Sounds complicated? Yes, it is complicated.
Can the government either set up/use/appoint their relevant organisation to provide the services of the dealgroups, that is, registration of qualified advisers, resources of compliance guidance, registration of approved product providers, professional indemnity, etc?
The professional bodies such as FPA will do the policing job on ethics and quality of advice as any other professional bodies are doing.
I believe this is a practical way needs to be explored to lower down the running cost so in turn the advice cost can be lowered as well without compromising the quality of service to the public.
The FPA are totally conflicted in this argument, they want to be the CPA of financial planners.
The bigger issue is this: What is good for the goose is good for the gander…
If your going to make advisers sit the FASEA exam and complete Ethics and additional education…then every AFSL RM and senior executive must also do the same. ASIC needs to go ahead with RG105 (option 6) and enforce that the leaders of AFSLs must do exactly as the advisers must do.
We need consistency across AFSLs and the only way to do that is have EVERYONE go through the process of FASEA. NOT just the advisers. Only then will AFSLs be on the same playing field with advisers – because we are ALL accountable to each other then to do the right thing.
Of course this makes perfect sense & well done FPA for putting it forward. I recall the last time this concept was floated, ASIC near soiled themselves because they did not have the capacity to handle so many FPs. I guess now that FP numbers are dropping & the use of other resources such as the TPB, this proposition might become viable. Of course, as always, the devil will be in the detail. If this has any legs, breakout the popcorn and watch as the government, the regulators, the associations, and the consumer groups tie themselves up in knots trying to make it work. Oh, don’t forget about the AFSL holders…they’ll be bleating about this long and hard, particularly those who have a business model based on advisers buying into the AFSL company. I understand some AFSL holders required advisers to part with significant cash….they will be smashed & adviser’s cash flushed down the loo! Better add a few glasses of wine to go with the popcorn for those poor guys!
SERIOUSLY? individual afsl will increase costs!! You know what should happen Dante? Swallow your pride and merge with other associations so we actually have a united voice instead of fragmented.
How would individual licensing increase costs?
The average cost of licensing for an adviser now is between $30,000 and $50,000.
How would centralised licensing by a competent and consistent body increase that?
Or EVERY adviser become a member of UFAA (www.ufaa.asn.au) who are actually fighting for advisers and lobbying the government on the adviser’s interest (about time someone too interest in our best/second best interest too).
They are one of the few in the industry that are a bigger joke than Dante.
The FPA are a disgrace , advisers need oversight , structure to ensure products are researched, compliance is independent to the adviser, and have enough size to support the advise process. FPA want to go back to the old days where product providers flogged their own product and were the source of all. Why because the FPA are obsolete and are looking for more ways to exist. Quality AFSL do not need them . talk about conflict of interest Daniel .
Its not about product, its about advice …
Mmmmm, I love the smell of self interest in the morning. While they would disagree, the FASEA reforms have rendered the CFP useless and as planners meet the study requirements for FASEA they won’t require the industry body membership for TASA requirements – for every CFP that decides there is no value, $1095 evaporates
Looks like a Trump ‘look over there strategy’ …. the FPA have been hammered in the comments section on industry new sites and this is their response. Well played. Works for Trump so should work for the FPA. What this space over the next few days as the sheep follow the lead 🙂
I think that is the smartest thing that I have heard from the FPA in my time in this industry. The only reason the AFSL’s exist is because they grew out of agency days where product providers sent out agents to peddle their products and operate something akin to a multi level marketing business such as Amway. However, over time, ASIC did not resource themselves properly and the only way that ASIC could manage so many Authorised Reps was to support an AFSL regime and put the onus of monitoring, supervision etc on the Licensee. Now, ASIC have nailed some big scalps and the Government has little choice but to increase their budget for monitoring and enforcement. The more that ASIC’s resource themselves, the less need for an AFSL system. Who will hurt? The operators of mid tier AFSL’s like “earning” their fees from self-employed SME’s, whilst having legal ownerships of those SME’s client relationships and lording over those same SME’s with white labels, compliance with no basis in common sense and complete lack of transparency to their own financials. Accountants, nor Lawyers operate under an AFSL system, so why should we? Hence, why we got our own AFSL!!
no cooments yet… they must be currently typing huge comments…
FPA has done enough damage to Financial Planners and here they go again. Dont know why anyone would pay a membership to that organisation just to be subjected to their irrelevance and demands on people that are already so far under the pump.
Having been self licensed for 15 years and having had numerous peers conclude similarly, it’s good to see this view – take responsibility for our actions. Totally agree with Dante.
ever had an audit by ASIC?