The terms “financial planner” and “financial adviser” will effectively be enshrined in law if recommendations proposed by the Parliamentary Joint Committee (PJC) inquiry into professional, ethical and education standards are adopted.
The chief executive officer of the FPA Mark Rantall (pictured, on the right), says the PJC has recommended modifications to the planned register of financial planners that will restrict who can call themselves a financial planner or a financial adviser. It has recommended that the Professional Standards Councils (PSC) must approve an association before its members can be included on the planner register.
“The recommendation is that [to be on the register] you have to be a member of [an approved] professional association,” Rantall says.
“To be able to hold yourself out as a financial planner or financial adviser, you have to be on the register. So effectively that enshrines the term financial planner and adviser in law.”
Original terms
The general manager of policy and conduct for the FPA, Dante De Gori (pictured, on the left), says the original terms of the financial planning register required planners only to list the associations they belong to.
“At the moment the register, the way Senator Cormann announced it, would include membership of a professional body,” De Gori says.
“But that wasn’t linked to any particular group or government body confirming who is [a professional body]. So you could list anybody: I’m a member of JYZ Association; that could go on the list.
“What the PJC is [recommending] is using the PSC to identify who is a professional body.”
De Gori says the PJC recommendation, if adopted, makes it unnecessary to continue to pursue the option of enshrining the terms “financial planner” and Financial adviser” in the Corporations Act.
Rantall says the FPA is not currently approved by the PSC but is “working through” the approval process.
“It’s not necessarily a one-off process,” he says.
“But we’re certainly working through the application process with the PSC. But in fairness, there’s a lot of work that needs to be done around that approval process as it relates to the PJC enquiry recommendations.”
Most significant opportunity
Rantall says 2015 is shaping up to be “probably the most significant opportunity that the profession of financial planning is going to have in terms of education and ethical and professional standards”.
“This is the biggest opportunity we’ve got as an industry and a profession to finally lift the education standards and the professional standards of financial planning to an appropriate level in this country,” he says.
“We call on everybody in the industry to get behind the PJC inquiry’s recommendations. Clearly, appropriate transition for financial planners will [need] to be sorted through, and the detail obviously needs to be worked through to make sure it’s workable.
“But in principle [the profession should support] the lifting of education standards to degree entry; the requirement for membership of approved professional associations; [and] having an approval process for professional associations that’s independent and government-regulated.
“Hopefully the whole industry can see its way clear to line up behind some of these important changes, to lift once and for all, the standards…for financial planners in this country.”
