The Financial Planning Standards Board (FPSB), which owns the CERTIFIED FINANCIAL PLANNER and CFP trademarks outside the United States, says it backs moves by the Australian Government and regulators to introduce legislation recognising the key role of financial-planning professional bodies in the oversight of financial planners as a benefit to consumers.
The umbrella body singled out the Financial Planning Association of Australia (FPA), one of the 24 member organisations of the FPSB, for particular praise in calling for the term “financial planner” to be protected by legislation.
Additionally it noted that the FPA had negotiated for inclusion in the FoFA legislation recognition of the duty of care to clients provided by financial planners who are members of a professional body with an approved code of professional practice.
“We congratulate the Australian Government and the Financial Planning Association of Australia for taking the initiative to protect consumers seeking the services of financial planners,” says Noel Maye, FPSB chief executive.
“If approved, these reforms, and the partnerships between government and professional financial-planning bodies they encourage, could provide a model for other jurisdictions seeking to establish and oversee the profession of financial planning.”
Australia’s proposed regulatory reforms are consistent with the approach recommended by FPSB’s tenets for effective financial-planning oversight, detailed in its position paper Regulation and Oversight of the Financial Planning Profession.
The body feels the following tenets outline a framework for how regulators and professional bodies could cooperate to oversee and regulate the financial planning profession:
- Use of the title “financial planner” should be protected in law or regulation
- Financial planners should be held to a fiduciary-like standard of care in law or regulation
- Use of related titles should be covered in law or regulation
- Oversight of financial planners should be undertaken by a professional financial planning body.
“FPSB’s position paper called for a collaborative effort between governments and professional bodies to achieve effective oversight of financial planning,” says Maye.
“We welcome enforcement of appropriate standards, and governments’ and regulators’ recognition of financial planning as a distinct professional practice.
“FPA Australia and the Australian Government are to be commended for taking a leadership position globally in creating a new model for financial-planner oversight, one that focuses on supporting and enforcing meaningful professional obligations, professional-body oversight and consumer protection.”
