FPA helps members adopt conflicts principles
In an effort to ensure a smooth implementation of the Principles to Manage Conflicts of Interest, the Financial Planning Association (FPA) has issued a set of guidelines to its members, which includes background, details of the principles and some worked examples.
The guide will act as just the beginning of a more proactive effort by the FPA to help its members adhere to the stated recommendations.
“We’ll talk about these principles at every opportunity we get. We’ll run CPD [continuing professional development]-type workshops, and that’s already underway, [we’re] putting together training sessions, working with principals on the interpretation and so forth,” FPA chief executive Jo-Anne Bloch said.
“We need to be really active and out there in the offices helping people understand what they need to deal with, whether it’s detail or high level or scenarios,” she added.
The FPA has also used the guidelines to clarify the purpose of the principles themselves.
“There’s been a lot debate about the obligation to provide appropriate advice and where that stands in relation to the planner’s duty to the client. This makes it clear that the client’s interest is to come first. Where there’s a conflict of interest, the planner is to put the client’s interest first,” FPA policy manager John Anning said.
FPA chair Corinna Dieters believes Principle One, which deals with the cost of advice, will have the biggest impact on the planning profession.
“We’re squarely positioning the value of the advice that’s delivered by a financial planner in the mind of the client, and that relationship between the client and the adviser is now being seen as the critical element,” she said.
“So I think that’s where we’ll see a shift towards a much clearer arrangement from a remuneration practice point of view,” Dieters added.
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.