Industry participants are holding some concerns over ASIC and New Zealand's Financial Markets Authority's (FMA) joint decision to allow advisers to practise on either side of the Tasman, based on qualifications and experience gained from their homeland.
The Trans-Tasman Mutual Recognition legislation applies to Australian financial services licence holders, which are mainly firms or companies, but the new arrangement will enable advisers to be recognised on an individual level.
FPA chief executive Mark Rantall told InvestorDaily that while the arrangement would not affect an overly large portion of the Australian market, it would have an impact on the industry.
"Given that we're waiting on the results of the consultation paper 153 (CP153) and the establishment of minimum examination requirements together with a self-regulatory organisation, it would mean that you'd have to map back the educational requirements for this country and for the New Zealand requirements," Rantall said.
"What's important here is that there are minimal requirements, but those are probably not satisfactory in terms of evolving financial planning into a respected profession."
If a new CP153 minimum requirement was introduced, it would be assumed New Zealand would have to adopt it as well, he said.
It was therefore vital for advisers looking to work across the Tasman to recognise the minimum qualifications were just an entry point and they should aim for a certified financial planner (CFP) designation, he said.
"The New Zealand financial planning association, the Institute of Financial Advisers, has a CFP designation as well, as we work in conjunction with them around that designation and the transferability of it," he said.
"There are lot of similarities in terms of the structure of financial planning, but it's the technical aspects that are a little different. Whether it be an Australian planner going to New Zealand or a New Zealand planner coming over here, they need to be adequately trained in those technical aspects."
Association of Financial Advisers chief executive Richard Klipin said the announcement was an opportunity and reflected the mobility of advisers, and allowed for flexibility in both systems.
"What we're seeing around the world is a harmonisation of a lot of the regulation and education standards in the industry," Klipin said.
"Whilst there needs to be detailed analysis to ensure quality standards in both jurisdictions, we're living in an increasingly globalised marketplace. In the same way that the regulators are spending time together, the markets that they supervise can actually benefit advisers and the clients they serve."
My Adviser managing director Philippa Sheehan said there was a potential problem as ASIC, the industry associations and the planning community needed to agree on Australian training standards and frameworks before looking to accept another country's.
"The introduction of the Financial Services Reform Act, specifically RG146, has seen a huge reduction in Australian financial planning training standards," Sheehan said.
"Since then, we have seen ASIC look to tighten this area of the industry with CP153. Muddying the waters by allowing New Zealand training to be accepted in Australia will be another step backward."
In addition, the New Zealand financial planning market was still focused on product rather than objective-based advice, which was where the Australian financial planning community was moving to, she said.
"I am not sure of the appeal. The only comfort I hope is that Australian financial planners moving to New Zealand would follow the same advice standards as they do within our country."
ASIC chairman Greg Medcraft said the mutual recognition arrangements would strengthen the Australian and New Zealand financial services industries by increasing competition and lowering transaction costs.
FMA chief executive Sean Hughes said it was a significant step, which supported the mutual desire for a more dynamic single economic market between New Zealand and Australia, particularly in financial services.
"It is important that we have taken this early initiative in the area of financial advice, which is so critical to the financial health of our communities on both sides of the Tasman," Hughes said.
