FPA members call on regulator for clarity on good advice

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Practitioner members of the Financial Planning Association (FPA) called on Australian Securities and Investments Commission (ASIC) for greater clarity and guidance on the definitions and features of good advice at the first FPA Shadow Shopper workshop in Brisbane this morning.

An audience of approximately 150 predominantly featured practicing financial planners, along with licensees and compliance, legal and training professionals. The event featured an expert panel comprising representatives from ASIC, Financial Ombudsman Service (FOS), the FPA and a CERTIFIED FINANCIAL PLANNER (CFP^®) professional.

Following a presentation on the Shadow Shopper’s methodology and a discussion of a hypothetical case study containing elements of good, adequate and poor advice, FPA members called for further clarification particularly in specific areas including:

• What needs to be included in a Statement of Advice (SoA)
• How to balance detail with brevity in an SoA
• How to best assess and disclose scope of advice, and
• How to communicate product replacement recommendations in an SoA.

Feedback from FPA members indicates that improved communication and education from the regulator to facilitate good advice was needed.

FPA Chief Professional Officer, Dr Deen Sanders, who sat on the expert panel, said, “In our role to advance the profession, we are pleased to bring together the key players today for an educational debate on good advice.”

“We know that it’s not easy to determine objective measures for ‘quality advice’ but the FPA’s key message is that the most effective strategy and the answer to the issues highlighted in the ASIC Shadow Shopper report is to work to the FPA Code of Professional Practice. Our members ask us for our view on good advice and our first response is always, ‘Follow the Code’.”

The event compere, FPA Chief Marketing Officer Lindy Jones, said, “This FPA event brought together for the first time all key stakeholders in delivering good advice. That FPA members as far as Toowoomba and Cairns made the trip reflects their commitment to best practice. The calibre of debate, technical expertise and passion to move the profession forward from FPA members was striking. We look forward to comparing the issues raised at our other workshops.”

The FPA will hold further Shadow Shopper workshops in Sydney, Melbourne, Perth, Adelaide and Hobart next week. Registrations are open and attendance will earn 3 CPD points.

Workshops are open to all stakeholders in the financial planning industry. Register at www.fpabestpractice.com.au/shadowshopper.