The Financial Planning Association (FPA) has stepped up pressure on the financial planning arm of the Commonwealth Bank of Australia, calling for Commonwealth Financial Planning (CFPL) to boost the compensation it is making available to customers that received poor advice from some of its financial planners. The adviser association is also adding its voice to calls for CFPL to raise the educational standards of its financial planners.
In a letter sent to members earlier today, Matthew Rowe, FPA chairman, said: “I believe we only get what we accept or tolerate, and on behalf of our members, we are no longer willing to accept what has been made public about the Commonwealth Bank’s management practices.”
“Today, we’re calling on CBA to establish an independently chaired committee to oversee a full and fair compensation process for all impacted clients – full stop.”
The letter outlined six steps the CBA should take in addressing concerns raised by the Senate Committee inquiry, including:
- Review professional standards and ethics of CBA employed and aligned financial planners.
- Fund ethics training for all CBA and Financial Wisdom financial planners.
- Support its financial planner membership of an approved professional body.
- Consult with us on their ongoing continuing education program.
- Commit to forming a cornerstone partner in the proposed FPA Industry Compliance Program.
- Invite an FPA Board representative to join an independent review committee into client compensation.
“People are tired of talk, they want to see people write their commitments down for all to see. If someone has another comprehensive plan which serves the community and the profession, please come forward. Otherwise, let’s stop debating the semantics and get on with it,” read the letter.
“It’s our view that now, more than at any other time, we must stand with Australians for a better financial future. This means aggressively pursuing our call for mandatory professional obligation, ethical standards, higher education and protecting the term ‘financial planner’ in the law.”
FPA stance on royal commission
Adding to Rowe’s comments, Mark Rantall, CEO of the FPA, also outlined the association’s stance on the Senate Committee’s call for a royal commission, suggesting a summit would be more appropriate.
“The FPA is calling for a Summit with a clear and independent charter around the changes needed to restore community trust in financial planning.
However, in the absence of such a summit “which commands the respect of the public, one with genuine teeth that can truly deliver positive changes”, he conceded that it would support calls for a royal commission.
“Our primary focus is the impacted clients of CBA and ensuring we never see something like this again. We need a system where when things go wrong, members of the profession act with speed and complete fairness,” Rantall said.
Click the following link to read the full letter: FPA letter
