FSR problems can be your problems
JUST over a week ago, on June 11, the long awaited and much feted Financial Services Reform Act (FSRA) passed the three-month mark since it became law.
Along the way it brought to the fore a number of key issues, such as alienation of personal services income (APSI) and Policy Statement 146 (PS 146).
These two things alone touched upon issues at the heart of every planner’s business, their remuneration and the skills they bring to the table to provide advice.
It also picks up every provider of financial services advice across the nation.
Given this there is no doubt that the FSRA marks a revolution in the regulation of financial services in this country. In fact, it has often been described as best practice for the regulation of financial services sectors around the world.
But for the financial services industry in Australia, the FSRA is also much more than that.
The FSRA is now regularly quoted by financial planners as the key ingredient to considerations over their particular position as a provider of financial advice — from their decision to add new services, to join a dealer group, and to their decision to leave the industry all together.
The FSRA has actually become a fully fledged player in the industry it aims to regulate, particularly where financial planners are concerned.
In a word, the FSRA has become all encompassing, at once the cure to the industry’s perceived ills, as well as the cause of much angst and turmoil.
All this begs the thought, as the industry now moves into the implementation stage of the FSRA, of what new issue will occupy the financial planning industry in coming years.
It is true that FSRA will come to occupy much time, but once it is in place, it will no longer be satisfactory for planners to attribute their woes to the FSRA.
The point of FSRA was not to make planners’ lives more difficult, but to ensure that the industry has legitimate, concrete and standardised benchmarks in the areas of education and compliance.
There are many groups that have regarded this as a positive step, but there are some that see it differently. Maybe they need to readjust their view, because if what is regarded as a world’s best system is causing problems, the root of those issues may be closer to home.
AUTHOR
Jason Spits
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