Call for financial planner passport scheme
The Commonwealth Bank (CBA) is calling for the introduction of a financial planner passport scheme, similar to the one operating in the United States.
CBA primarily used its submission to the Senate inquiry into the performance of the Australian Securities and Investments Commission (ASIC) to detail the steps it had taken in relation to the Commonwealth Financial Planning (CFP) scandal, including change of management and culture, and a $25 million investment into adviser monitoring and supervision systems.
However, the bank also outlined suggestions for improvement of the financial planning industry, which include the introduction of the financial planning passport scheme.
Under the scheme, financial planners would be required to hold a passport containing information detailing their experience and conduct within the financial services industry, CBA said.
“Such information would be available to both current and prospective AFSL [Australian Financial Services Licence] holders, on request to ASIC, who seek to authorise the financial planner under their AFSL,” the bank’s submission read.
“In order to protect the privacy of financial planners, CFP suggests that ASIC should be the sole custodian and administrator of such a passport scheme, with information provided regularly by AFSL holders on each of their representatives.”
CBA would also like to see ASIC and AFSLs freely sharing information about individual financial planners when they move between licensees, to make sure the reasons for those moves are transparent.
“CFP believes there is a risk that financial planners who do not adhere to appropriate standards of advice enter the industry, or move within it between AFSL holders, and for professional misconduct not to be taken fully into account,” the bank said.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
