As the Commonwealth Bank of Australia (CBA) news broke, I could sense hearts sinking. Not just my own, but the hearts of thousands of financial planners across Australia, relentlessly campaigning to change the future of our profession.
When an industry player as large as CBA – responsible for more than 1800 salaried and aligned advisers – is at the centre of mass public suffering and stress because it failed to enforce sufficient standards, isn’t it time to put things right?
We welcomed the announcement by CBA to appropriately compensate clients who were victims of advice failures and hope that there is sufficient action behind it. The absence of high industry standards is the sole cause of the fundamental shortcomings within Australia’s financial advice industry.
I will continue to campaign to ensure that all financial planners have a relevant university degree and three years’ experience over a five-year period. It is also our position that meeting professional standards is not a one-off expectation. All financial planners should also be obligated to undertake a minimum number of professional development courses – to remain current, up-to-date and in prime position to service clients.
When such minimum standards are placed in conjunction with a restriction on the use of the term “financial planner” or “financial adviser”, we see the beginnings of a viable and sustainable profession that benefits consumers, planners and the advice industry at large. This is what consumers deserve and it is also the only way our profession will build confidence with the Australian public.
The FPA 10-point plan
Our recently published 10-point plan outlines in black and white the action required to raise educational and professional development standards, so that we can better protect Australians from another catastrophe. Our recommendations are in the interests of our members and represent the high standards already displayed by FPA members on a daily basis.
Only a combination of consistently high standards and adherence to a professional code will see our profession live up to what is expected from us. We firmly believe that our 10-point plan will create a crystal clear separation between product and advice, and will ultimately deliver professional autonomy for financial planners. In turn, consumers will be well informed and in a better position to seek the right advice.
The recent events at CBA only serve to strengthen my resolve and determination to see that all new financial planners hold an appropriate degree qualification, and all financial planners undertake a minimum amount of continued professional development, every three years. The statistics around ASIC enforcement speak for themselves and go a long way to support the criticality of such standards.
It’s time to shout louder
More than ever, now is the time to get vocal. Professional financial planners, our profession as a whole, and most importantly, critical industry stakeholders who individually have the power to facilitate change, must take action. This is a grass-roots campaign and we need all hands on deck.
We ask all FPA members to make it known to their licensee that they support our 10-point plan and ultimately, our drive for improved governance of the financial advice industry. Don’t be afraid to speak out and let them know why you support our position, because every voice matters.
Following the direction of the 10-point plan, we now have an opportunity to distinguish ourselves as world leaders in financial planning. We need to restore trust in this sector, once and for all. Our profession cannot afford any more financial advice catastrophes in the media. Now is the time to unite, in support of high standards that consumers will one day recognise and respect.
If not now, then when?