FPA backs regulatory intervention on soft dollar

The Financial Planning Association (FPA) would back a push to enshrine its code of conduct on soft dollar payments into legislation — a move that would make the code compulsory for all advisers.

The code, which is due to take effect from January 1, bans some alternative forms of remuneration that are volumes sales related and requires others to be publicly disclosed.

However, the code will apply only to members of the FPA and the Investment and Financial Services Association (IFSA), which jointly developed the code with the FPA.

Incoming FPA chairperson Kathryn Greiner says the association would support moves by the Government to lock the code into legislation and make it applicable to all advisers.

“If they choose to enshrine it in legislation, we wouldn’t have any problem with that from a professional or industry point of view. I think that is going to happen anyway,” Greiner says.

The comments were prompted by a Labor Party policy announced in the dying days of the Federal election campaign before last weekend’s poll. The ALP called for legislation to ban some soft dollar payments and ensure others are adequately disclosed.

Greiner says the credibility of the planning profession hangs on an industry wide take-up of the code of conduct and the FPA would back government intervention to make it happen.

“My personal view is that self-regulation is better, but if the government thinks that regulation is what they need, I can understand where they are coming from,” Greiner says.