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The Financial Planning Association of Australia (FPA) continues to champion the need to change current education requirements within the financial planning profession, focusing heavily on this in its recent submission to the Parliamentary Joint Committee (PJC) Inquiry.
According to Mark Rantall, CEO of the FPA, the submission’s focus on increasing minimum education standards and requirements for those providing personal financial advice to consumers is a natural continuation of the aspirational, but achievable recommendations outlined in the FPA 10 Point Plan released earlier this year.
“The PJC Inquiry, designed to examine financial planner education, professional standards and ethics, and recognition of professional bodies, will help advance the profession of financial planning. We welcome the opportunity to put our views forward on what specifically this advancement should look like in terms of minimum degree qualifications to be a financial planner/adviser, recognition of professional bodies and General Advice being re-named ‘general or product information’.
“Australia’s largest institutions have recently stepped up and announced they will be lifting their education standards for the benefit of consumers, and the profession. This in in line with our 10 Point Plan to restore trust in the financial planning profession. Consumers deserve this and more, which is why getting the outcomes of this Inquiry right is important.
“When implementing new standards, it’s important we lead for the future and respect the past. We therefore consider it important to introduce an appropriate transition and pathway options for existing advisers, and an approved degree requirement for new advisers from 1 January 2018.”
“We are committed to working with government, industry bodies, financial planners and consumers to ensure we live up to the expectations of our profession. When all financial planners are members of a professional association, when all financial planners are listed on a public register, when more financial planners carry the world class CFP® designation, we are in a better position to uphold trust in our industry.”
Mr Rantall pointed to recent ASIC enforcement actions to highlight the clear distinction between financial planners who are members of a professional association and those who are not.
“Our review of data collected since 2009 on ASIC enforcement action concerning individuals in relation to financial advice, shows that FPA members represent significantly less than 5% of the overall ASIC enforcement action each year – even though they represent nearly 50% of financial planners in Australia. From a professional stand-point and in the eyes of consumers, it should be clear then that being a member of a professional body with additional regulatory oversight of professional obligations is an obvious gold standard.”
The FPA’s full submission will be available to media following its publication by the PJC.