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New proposed advice framework highlights current ‘tick-a-box’ approach to compliance

The Financial Planning Association of Australia (FPA) has praised a new proposed advice framework put together by the Financial Service Council (FSC) which it says could reduce the cost of advice by almost 40 per cent.

On Monday, the peak body released a white paper which outlined a framework that could cut costs by almost $2,000 through recommendations that include raising the threshold under which clients are identified as retail clients with those with assets of less than $5 million, abolishing the safe harbour steps for complying with the best interests duty and removing “complex” SoAs in favour of a letter of advice.

On Thursday, FPA CEO Dante De Gori threw his support behind the proposal and said it must be acted on ahead of the government’s implantation of the Better Advice Bill next year which will expand the role of ASIC’s existing Financial Services and Credit Panel to operate as the single disciplinary body for financial advisers.

“With the government’s intention to introduce a single set of standards for the financial planning profession, we believe now is also the time to prioritise the establishment of a principles-based professional and ethical advice model, as opposed to the current ‘tick-a-box’ rules based approach to compliance under the existing regulatory framework,” Mr De Gori said.

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“With these measures in place, the next crucial step to get right and ensure the success of the proposed single disciplinary model and a principles-based professional advice model is to create a true professional registration model, which is a key recommendation from the FPA’s Policy Platform.

“The creation of a personal obligation to register is an essential component of any professional framework and this is essential to achieving the outcomes the FPA and FSC have recommended in our respective policy visions.”

Submissions for feedback surrounding the Better Advice Bill’s draft exposure regulations close on Friday.

New proposed advice framework highlights current ‘tick-a-box’ approach to compliance
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Neil Griffiths

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.

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