The Financial Planning Association (FPA) has come out in support of the Financial Services Reform Bill (FSRB) in the wake of criticism of it by a Parliamentary Joint Statutory Committee on Corporations and Securities.
The Committee said in a report on the FSRB that small business would be harmed by the FSRB and that it will reduce small business’s market value.
FPA chief executive Ken Breakspear has hit back at this criticism and says that a survey of FPA members shows that small business financial planners were on the whole, ‘bullish’ about growth over the next financial year.
The survey, which has been conducted every year since 1966, shows that 84 per cent of the respondents expected their company earnings to increase during the next financial year by an average of 26 per cent.
Breakspear said over the past five years, the number of small financial planning businesses has grown by 24 per cent. He argues that they have grown under the regime of the Corporations Law, and this was unlikely to change once the FSRB had been implemented.
Breakspear also attacked the Committee’s recommendation that the Bill should not require the disclosure of the quantum of commission on risk products. He said this would represent a back down on transparency of all fees, commissions and charges which is in the consumer’s best interests.
Another recommendation made by the Committee was that lawyers and accountants should be exempt from the Bill’s reach when giving ‘incidental advice’.
Breakspear responded by declaring this a mistake, as advice is never incidental to a consumer who relies on that advice, and that lawyers and accountants should remain under the oversight of the Australian Securities and Investments Commission.
