FPA submission doesn't go far enough: Plan B

The financial services industry may need two regimes, the current, which would deal with product sellers, and a much more rigorous set of standards for true financial advisers, according to Plan B Wealth Management managing director Denys Pearce.

Pearce was responding to the Financial Planning Association’s (FPA) submission to the joint committee of corporations and financial services inquiry.

He said the industry comprises two different groups of people — salespeople and those seeking to provide holistic personal financial advice — which causes a problem.

“You can’t have the same set of standards to regulate both groups.”

In a statement, Plan B Wealth Management hit back at the FPA’s submission saying it doesn’t go far enough.

According to Plan B, the reforms proposed by the FPA need to be strengthened in three main areas including educational qualifications, experience and trustworthiness.

It said those providing financial advice need higher qualifications than those suggested by the FPA.

The level of competency and responsibility necessary in providing personal financial advice requires training at a vocational graduate diploma level, Plan B said.

It believes there is a minimum level of experience needed by qualified professionals before they are able to advise clients.

Plan B said its own professionals are required to work for three years under an adviser before providing client advice on their own.

Plan B also suggested the trustworthiness of a financial advice business should be established by means of an audit and certification process.