FPA seeks level playing field
The Financial Planning Association (FPA) has appealed to the government to axe its proposal to introduce a declared professional body (DPB), saying it unfairly advantages accountants and lawyers in the provision of financial advice.
The proposal is part of the Financial Services Reform Bill (FSRB) and would allow a professional body outside the financial services industry to obtain a licence and authorise its members to offer financial advice. Members of the body would then be exempt from financial services competency and conduct standards.
At a public hearing into the FSRB, the FPA made a submission to the joint statutory committee on corporations and securities.
"We believe such an exemption would undermine competitive neutrality and deliver a lower level of consumer protection," the submission says.
Acting chief executive office of the FPA, Ken Breakspear, says that while lawyers and accountants currently have an incidental advice exemption, that exemption is no longer valid.
"We would say it's really outdated and belongs to a different era," he says.
"From a consumer point of view, advice is never incidental and from a competitive neutrality point of view, this is an anomaly in the system which gives others a competitive advantage."
In its submission, the FPA also says that the DPB provision will lower entry level standards to the profession.
"We believe the DPB provision provides for a soft registration with lower threshold levels for standard of entry and conduct compared to the full licensing requirements," it says.
The FPA is calling for a co-regulatory model whereby licensing and regulation is performed by a regulator and the industry or professional association plays a role in developing best practice codes, practice guidelines, education and the building of a professional culture.
AMP's head of distribution Steve Helmich says he supports the FPA stand.
"What we are trying to do is to have a level playing field. If we start making exemptions for so-called professional bodies before we even start, then we're really opening up Pandora's box," he says.
However, Count Wealth Accountant's Barry Lambert says that a licensing regime for professionals who might only give very general advice would promote inefficiencies within the industry.
"Accountants have been looking after people for hundreds of years and they know there are general knowledge limitations to the advice they can offer - that's why they have a referral system," he says.
"If the FPA is saying that every accountant needs to be licensed before they open mouths then that's just playing vested interests. The consumer must be able to go to a trusted person for general advice, then to a specialist for more specialist advice. That's just common sense."
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