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The Financial Planning Association of Australia (FPA) is maintaining pressure on the Government to amend draft legislation on the transition to higher education standards for financial planners.
FPA General Manager Policy and Conduct, Dante De Gori said today the association was hugely supportive of the Government’s proposed higher educational standards for new financial planners. The FPA has consistently advocated that the current RG146 requirement to enter the profession was too low and needed to be raised to a degree level.
“We applaud the Government for going hard on the proposed changes, but some are simply not practical or workable, especially for existing financial planners,” Mr De Gori said.
The draft legislation needed to be amended so transition requirements for existing financial planners could be developed by the new independent standards body that will be created to oversee the education framework.
Mr De Gori said this new body should be permitted to consider a financial planner’s existing training, qualifications, experience and ongoing continued professional development (CPD). Forcing all existing financial planners to have to complete a bachelor degree was neither practical nor appropriate, he added.
“This does not mean that existing financial planners are not required to do more. In some cases existing financial planners may need to complete further studies. In addition, some will be subject to a code of ethics for the first time. Under this, they will be required to complete an exam and there will be minimum CPD criteria for all. The bar is being raised, but we ask that it is done in a sensible way. We are also asking that the new independent body has the opportunity to do what it is tasked to do.”
The consequence of this issue not being addressed would be a dramatic reduction in financial planner numbers,” Mr De Gori warned. “This would impact tens-of-thousands of clients and hundreds of small planning businesses, many of which would have to close doors and shed employees”.
Mr De Gori said the FPA also supported the Government proposal to have all financial planners subject to a code of ethics, however requiring the new standards body to create a new code would also have unintended consequences.
Any new code would lack legitimacy as existing professionals would not be represented on the body creating it, and it would compete with existing widely-supported codes. For these reasons, it would be better to give the new standards body the legal function of recognising existing professional body codes of ethics, subject to a criteria to ensure consistency, Mr De Gori said.
The FPA submission praised the Government for plans to enshrine the term financial adviser/planner as this would strengthen consumer protection and reinforce compliance to professional standards by ensuring only those who had achieved certain standards could use the title.
Read the FPA submission here.