Planners brace for FoFA: round two

November 22, 2011

The Labor Party Caucus has approved Future of Financial Advice (FoFA) tranche two, with the legislation likely to be introduced to Federal Parliament on Wednesday (23 November). The reforms should follow the first wave of FoFA recommendations to the Parliamentary Joint Committee on Corporations and Financial Services, headed by Bernie Ripoll MP.

While the stakes remain high for financial planners and advisers across the spectrum, the discussion now effectively moves within a legislative framework.

“We must get the issues right on all FoFA reforms but this is no longer a debate about policy, it is a debate about details,” said Dante De Gori, general manger, policy and government relations at the Financial Planning Association of Australia (FPA).

FPA head Mark Rantall and De Gori will appear before the Parliamentary Joint Committee in early December to put forward the FPA case in regard to the first tranche of FoFA reforms and answer any queries.

However, a focus on the second round of reforms is likely to advance the overall debate, which has tended to become bogged down over the issue of opt-in.

While Ripoll used the recent FPA Conference in Brisbane to put across the Government’s position of changing the culture and behaviour of the advice industry, the debate on FoFA reforms repeatedly returned to opt-in.

Rantall, said he was disappointed that the debate had devolved to the extent that opt in had become the focal point of the reform agenda.

“What’s really important here is that there have been advice failures, there have been systemic product failures, there is financial illiteracy and the vast majority of the Future of Financial Advice reforms are very positive initiatives which we support,” he said.

“However it is nonsense that opt-in is critical to the FoFA legislation. I think the big-ticket items here are the best interest test and the ban of conflicted remuneration which we support wholeheartedly.”

debate, Financial Advice, FoFA, FPA

6 responses to “Planners brace for FoFA: round two”

CFP graduate

November 24, 2011

The FPA vote last year was a con job on its members. The FPA remains focused on retail product group interests, and the idea that an industry dominated by product groups can become a profession is laughable. Only the truly gullible believe the FPA represents individual advisers. To be credible the FPA needs to do three things: remove product group executives from its leadership and committees, speak out against product group ownership of the advice industry and lobby for the individual licensing of advisers. In the meantime the FPA is an embarrassment to the ideal of professionalism.

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Matthew Brown

November 23, 2011

Earlier this year the year the FPA sought unconditional support from its membership base for constitutional change removing “principal members” and large institutional dealer groups, this was overwhelmingly supported by 94% of members who voted. As a “Profession”, the FPA represents professional practitioners that sign up to a code of professional conduct, adhere to a code of ethics and meet stringent educational standards, yes the FPA is the peak the professional body representing Financial Planners in Australia and as a member we are proud of that. Yes we want to enshrine the term “Financial Planner” and we want all consumers to be aware and feel 100% comfortable and trustworthy that when they sit with a “Financial Planner”, they know that this professional has signed up to a professional code of practice. The FPA represents professional practitioners of the Financial Planning Profession, and we would welcome all professional Financial Planners to become members of the FPA (as long as you are suitably qualified and sign up to the code of professional conduct and represent the clients best interest) and help drive our profession.

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1. anne cavenagh
  
  December 3, 2011
  
  Heard it all before from the FPA . Love the use of the words “enshrined” consumers being”comfortable ” “trustworthy” “peak” proffessional body ( who says so??) blah blah blah .To be a professional you don’t need to be a member of the FPA you need to be a member of a proffessional body representing your industry, The accounting industry has several CPA and chartered accountants to name two and there are several that represent financial planners.
Ross Cardillo

November 23, 2011

Agree.
The FPA have spent far to long collecting money from financial advisers and then taking the side of consumer groups. government or anyone else that wants to denigrate planners. The AFA represents financial advisers with a clear message, as was said earlier the FPA needs to get their own house in order, but really a better idea would be for the FPA to cease to exist

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1. Jim Finnerty
  
  December 12, 2011
  
  Hear, hear! Succinct and to the point. Truer words were never spoken.
anne cavenagh

November 23, 2011

What concerns me here is that the FPA which claims to represnt the majority of financial planners is once again beating its own drum. it wants to highjack the term “financial planner” meaning only “suitably qualified ” planners ( read having passed our exam and paid us huge sums of money) can use it.The Irony here is that the FPA’s big membership base comes from large institutional dealer groups whose advisers fog their product, their plateforms charge shelf space and they pay volume based commissions.

The FPA need to get their own house in order before they tell the rest of us what we should be focused on. If its members at their recent conference debated the opt -in and it was the focal point there is a reason for that, probably because its the members major concern and the FPA needs to suport their members not drive their own adgenda.
I hope the beaurocrats in Canberra are aware that the FPA only represent some financial planners.

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