The FPA has come out in support of a number of ASIC recommendations to improve Australia’s advice industry, but has concerns over the corporate regulator’s failure to address timeframes for its proposals.
In response to ASIC’s submission to the Parliamentary Joint Committee Inquiry into financial products and services, FPA chief Jo-Anne Bloch said the corporate regulator had placed firm stakes in the ground.
“We certainly support the need for a fiduciary responsibility. We support changes to a remuneration practice,” Bloch said.
“We’ve certainly noted and absolutely agree that they recognise that the entry standards are too low. We applaud the fact that they have recognised that licensing is not working as effectively as it could and that they are looking for government support to change the law to give them greater powers in that area.”
As well as not addressing timeframes for its recommendations, the FPA were disappointed ASIC has made no mention of the role of a professional body, Bloch said.
“We are disappointed that ASIC has made no mention of the role of a professional body and has acknowledged certainly the contributions the FPA has made to the debate, but has not necessarily addressed the role an accredited professional body can play in improving behaviour in the industry and adherence to the rules and regulations that may not always be enshrined in the law,” she said.
“ASIC has also not addressed timeframes, which is fairly critical and we would be keen to talk about them.”
ASIC’s failure to address the issues surrounding the term “financial planner” or “authorised representative” and comments on asset-based fees was also a concern.
“Financial planners will find it extraordinarily difficult to move from the current system to one that is an hourly-based system,” Bloch said.
“We know accountants and lawyers have struggled on an hourly-based system, and we believe financial planning is not exactly the same as accounting and law in that you have a longer-term relationship with a client and we strongly believe that will also limit the choice for clients in terms of how they can pay for advice and how they can access advice.”
