The Financial Planning Association (FPA) is calling on government to provide greater clarity around the grandfathering provisions of the Future of Financial Advice legislation – which, under some interpretations of the regulations, may result in an anti-competitive scenario in the financial planning market, locking advisers into their current licensing arrangements – and has so far received positive signs.
“Just last week I met with [Assistant Treasurer] David Bradbury around the grandfathering issue and I put our case forward,” FPA chief executive Mark Rantall said at a media briefing in Sydney yesterday. “His response was that it would be something that would need regulatory change.”
However, since the government has now entered caretaker mode, with the calling of a general election, advisers will be left in a “time warp of regulatory change” with “no decision to be made until after the election”, Mr Rantall said.
Specifically, the FPA is calling on whomever wins government at the election to commit to “a systemic approach which ensures financial planners are free to move to licensees that suit their clients’ needs through fixing the glaring anomaly in grandfathering provisions”.
But while the FPA is calling for greater clarity, it also said the lock-in consequence of the grandfathering regulations as they stand may be overstated.
“You can’t blanketly say that everyone who wants to change licensee will receive the same advice – everyone’s situation is different,” said FPA general manager, policy and conduct, Dante De Gori.
“Our message is seek your own legal advice, as you may actually be in a position where you are not captured by the grandfathering regulations,” he added. “I would advise against telling people to do nothing, but they should be aware of their situation and the potential consequences.”
The FPA’s reading of the regulations is contrary to that of the Association of Financial Advisers, with AFA chief executive Brad Fox recently telling InvestorDaily he has a very clear message to advisers.
“If you are thinking of joining a new licensee – particularly if you are an older business – then wait,” Mr Fox said.
The FPA has also called on the post-election government to “ensure that duplication of registration under the Tax Practitioners Board as well as ASIC does not mean duplication of competency standards, currently being created” as well as calling for the removal of FOFA’s opt-in requirement – a policy move already committed to by the Coalition.
“The fledgling industry of financial planning has copped a tortuous period of regulatory reform on the chin,” Mr Rantall said
“It is high time for all participants – from government and all players within the Australian financial services ecosystem – to support and promote the benefits of getting quality advice from qualified professional financial planners.”
The Assistant Treasurer’s office did not respond to requests for confirmation by InvestorDaily’s deadline.
