The Financial Planning Association of Australia The Financial Planning Association of Australia

Government response on FSI a win for consumers and the professionalism of financial planning: FPA

The Financial Planning Association of Australia (FPA) has welcomed the Government’s response to the Financial System Inquiry (FSI), calling it a win for consumers and the financial planning profession.

In its response to the FSI Inquiry report, the Government today committed to legislation that would lift education standards of financial advisers, amend the term ‘general advice’ and protect the term financial planner/adviser.

The Government also agreed to create an independent education standards body to oversee the financial planning industry, but said detail around this and other measures would not be developed until the middle of next year.

CEO of the FPA, Mark Rantall, said these welcomed changes were in line with the FPA 10 Point Plan designed to provide foundations for better consumer outcomes, and improved professional standards for financial planners.

“Higher education standards are a win for consumers and pave the way for increased professionalism in financial planning. We are delighted that the Government has listened, will consult further and then legislate to put in place needed measures to meet the financial needs of all Australians.

“We congratulate the Government and look forward to working with them to implement measures that will lead to best practice financial advice and improved consumer confidence,” Mr Rantall said.

When it came to life insurance reforms, the Government has not agreed to support the FSI recommendation of level commission only, but will continue to support the proposal announced by the previous Minister on 25 June 2015.

Key Government announcements on financial planning reform included that:

  • Financial planner education standards will be raised to a relevant tertiary degree for new advisers
  • Financial planners will be required to pass an exam, complete ongoing professional development, subscribe to a code of ethics and undertake a professional year, all of which align with the FPA 10 Point Plan
  • The current ASIC financial adviser register will be enhanced to include relevant bans and disqualifications or code breaches
  • The terms financial planner/adviser will be restricted to those listed on the register
  • Legislation to bring this to effect will be introduced by mid – 2016