FPA rejects claims its membership is sold

The Financial Planning Association (FPA) has formerly rejected a claim in a submission to the Parliamentary Joint Committee on Corporations and Financial Services that membership of the FPA is ‘bought and carries no obligation’.

This was one of a number of claims made in what the FPA described as “adverse” submissions to Parliamentary Joint Committee on Corporations and Financial Services in relation to the collapse of Storm Financial.

In a letter to the committee, FPA chief executive Jo-Anne Bloch said it could be demonstrated to the authors of the submissions, which it presumed to be former Storm clients, that membership of the FPA “does indeed carry substantial obligations and cannot be bought”.

“Principal members are required to meet all the obligations of the law and to then support our expectations of professionalism as detailed in the code of professional practice.

“Further, we can demonstrate that this obligation has proven to extend to practice and safety benefits for consumers, where evidence shows that Australian Financial Services Licensees who are not members of the FPA are nine times more likely to be reported by the Australian Securities and Investments Commission for investigation and or prosecution.

“We acknowledge that this was not proven true in the instance of Storm Financial, but we hold that Storm is not reflective of normal financial planning practices,” she said.