As part of the association's campaign to separate product information from financial advice, the Financial Planning Association last week unveiled a white paper outlining 10 initiatives designed to achieve this policy outcome and raise competency standards in the advice industry.
Speaking to InvestorDaily, finance minister and acting assistant treasurer Mathias Cormann said that while the premise of the white paper is sound, a “one size fits all’ approach to financial advice regulation is inadvisable.
“I always warmly welcome any initiative by the financial advice profession to improve its professional and service standards,” Senator Cormann said. “[But] there are necessarily different business models available in the market and that’s a good thing. Diversity in the financial services market provides choice and helps deliver best possible value for consumers.”
Senator Cormann reiterated the federal government’s position that regulation of the financial planning industry needs to “have the balance right between appropriate levels of consumer protection and making sure that access to high quality financial advice remains available and affordable for all”.
Meanwhile, the Association of Independently Owned Financial Professionals – which represents chief executives of non-aligned financial planning licensees – has raised a number of concerns with the plan, which AIOFP chief executive Peter Johnston intends to take up with Senator Cormann.
“This is a blatant denial of natural justice where the initial damage caused by an ASIC investigation in the media causes irreparable damage to the practice and its reputation with consumers and the industry generally,” Mr Johnston wrote in an email to members, seen by ifa, adding that the proposal would give the regulator the power to “shoot and ask questions later”.
“If the adviser has the resources or energy to challenge the decision in the [Administrative Appeals Tribunal] their practice and reputation has been destroyed, even if they win they lose,” he added.
