The regulatory environment in Australia has been praised by Financial Planning Standards Board chief executive Noel Maye, who says it has found success in the “embracing of advice” as distinctive from product selling.
The FPSB owns the CFP program outside of the US and licenses it to 27 countries including Australia which is administered by the Financial Planning Association.
Maye tells Professional Planner ASIC has benefitted from its consultation and collaboration process.
“You have a regulatory regime that is more focused on finding solutions that tries to ensure consumers get access to advice and digging deep into what advice is.
“Having read some of the recent consultation papers, I credit them on using plain English,” he continued. “The key to continuing that discussion is by getting clear on what is selling and what is advising and how does it all fit together.”
Another advantage Maye points to is the development of a framework that puts oversight of the sector towards one body.
“That gives the regulator an opportunity to pull together the distinct elements of financial services into a cohesive regulation scheme.”
For those who don’t share Maye’s enthusiasm about Australia’s regulatory environment, he is willing to put it into perspective.
“It’s the old adage: if everyone sat around in a circle and put their problems in the centre, you take your own back once you hear everyone else’s,” he says. “When it comes to regulation, there’s so much diversity in what’s going on around the world.”
Another trend Maye sees across the FSPB’s various CFP jurisdictions is regulators looking at professional bodies as a compliment to support regulatory frameworks.
“Regulators are going to be focused on compliance and rules-based issues and when it comes to face-to-face interactions between the adviser and the client that’s really coming down to a matter of ethics,” he says.
“Compliance is something you do if you think someone is looking over your shoulder; ethics is what you do when you’re on your own in a room with someone that might be vulnerable.”
A regulatory and compliance framework, Maye says, is complimented by a core of competent advisers committed to putting their clients’ interests first.
“The power in the forward plan for oversight of financial advisers and financial planning is the interrelationship of those two.”
The major project being taken on currrently by the FSPB is “future proofing the profession”, which Maye says is to make sure the designation continues to evolve and be refined to reflect technological innovations and shifts in client expectations.
The included undertaking a global job analysis in 16 territories with feedback from 12,000 professionals and a ‘future of financial planning practice’ research project in 24 territories which included 4,200 professionals.
“We’re doing work on facilitating human advisers to be more human,” Maye says. “Upskilling the communications, coaching, collaboration skills and preparing professionals to be partners with their clients and empowering clients to take more control and participation in their financial planning as well.”
The end of 2021 saw the total number of CFP professionals worldwide reach 203,312, an increase of 5.5 per cent during the year.
“That was across emerging markets, developing and mature markets,” Maye says. “It was a substantial majority of our affiliate network that saw an increase.”
Australia was one of those exceptions recording a four per cent decline in CFP numbers, but increasing its share of the market as the wider industry had an 11 per cent drop.