Royal Commission could disrupt financial advice reform, says FPA
The Financial Planning Association of Australia (FPA) has highlighted that millions of tax payers’ dollars could be wasted should the Royal Commission into financial services include advice.
FPA CEO, Dante De Gori CFP®, said: “Australia’s financial planning profession has undergone extensive inquiries and subsequent legislation over the years, which we’ve seen take place since the Ripoll Report was handed down in 2009. These have led to significant changes that solidify financial planning as a profession.
“All financial planners are now subject to a best interest duty and conflicted remuneration has been banned. Since the implementation of the ASIC Financial Adviser Register, all licensed financial planners are now listed on a national register. Additionally, all financial planners must be personally registered, or supervised by, a registered individual with the Tax Practitioners Board (TPB). The TPB also requires financial planners to abide by a code of ethics, meet higher qualification standards, and undertake continued professional development activities.
“Together, these changes are leading to significant improvements in consumer outcomes. Many of these measures are less than three years old and are still in implementation phase. It is important that we allow time for the full impact of these changes to be felt.
“We are also on the cusp of introducing additional financial advice legislation, including higher education and professional standards in advice. This legislation includes the introduction of a degree entry requirement for new financial planners, a professional year, and a code of ethics.
“We have come a long way in setting strong foundations for a financial planning profession that will truly serve and protect the interests of Australian consumers in the next decade and beyond. Not only would a Royal Commission put this on hold, but it would also mean that millions of tax payers’ dollars would be wasted,” said Mr De Gori.
Mr De Gori went on to say that the financial planning profession has been subject to 54 inquiries, reviews and consultations since 2009. This has led to the introduction of five major legislative regimes and increased regulation to address industry issues and provide better consumer protections.
“There have been key reforms in the financial planning profession, including the Future of Financial Advice (FoFA) and the enshrinement of the term financial planner into law, due on 1 July. The most important principle of FoFA is greater consumer protection, and we have worked hard for the last five years to achieve better consumer outcomes and ensure that financial planners deliver quality financial advice.
“What we need to do now is focus on what has already been achieved and move forward with workable legislation that we have in place. Only then will we be in a position to evaluate the success of these significant measures,” said Mr De Gori.
List of key Inquiries into financial advice since 2008/09 (including implementation of financial advice related legislation) – for the full list, click here
- Parliamentary Joint Committee on Corporations and Financial Services inquiry into Financial products and services in Australia (2009)
- Superannuation System Review (Cooper Review) Panel (2009-2010)
- ASIC Report 224 – Access to financial advice (2010)
- Parliamentary Joint Committee on Corporations and Financial Services Inquiry into the Collapse of Trio Capital and any other related matters (2011)
- Treasury Statutory Compensation Review (Richard St John Consumer Compensation Review) (2011-12)
- ASIC Report 279 – Shadow Shopping of retirement advice (2012)
- Senate Economics References Committee inquiry into The performance of the Australian Securities and Investments Commission (2013)
- Financial System Inquiry (2013-2015)
- Senate Economics References Committee inquiry into Forestry managed investment schemes (2014)
- ASIC Report 413 – retail life insurance advice (2014)
- Senate Economics Reference Committee inquiry into Scrutiny of financial advice (2014 – ongoing)
- Senate Economics Reference Committee inquiry into criminal, civil and administrative penalties for corporate and financial misconduct or white-collar crime (2016)
Key Legislation Packages
- FOFA (2012 – 2016)
- TASA (2013)
- ASIC register of financial advisers (2015)
- Life insurance framework (2016 – currently in the Senate)
- Professional Standards and Education (2015/6 – currently in draft)