The Financial Planning Association of Australia (FPA) has joined the swelling chorus of voices supporting changes to how financial planners are licensed and authorised to give advice.
The licensing regime for financial planners was under scrutiny even before the Royal Commission into Misconduct in the Banking, Superannuation and financial Services Industry turned its attention to financial advice and raised specific questions about the current approach. But the inquiry’s attention has given the issue a big kick along.
The current licensee-authorised representative structure is seen as lacking legitimacy and as being a significant impediment to financial planning evolving into a profession akin to law or medicine or engineering, among others.
In its written submission to the royal commission the FPA says there are “several options that could achieve the outcome of individual oversight of financial planners”.
The practical impact of each of the scenarios is to shift considerably more responsibility and accountability for the quality and delivery of advice to the individual practitioner, and away from the licensee entity as it currently exists.
This is consistent with the evolution of financial planning towards a profession. And it is also consistent with professional, ethical and education standards currently being developed by the Financial Adviser Standards and Ethics Authority (FASEA), which come into effect progressively between now and 2024 and impose additional obligations on the individual.