The possibility of a single professional association arose during several sessions at the Financial Planning Association (FPA) national conference, one of which included Australian Securities and Investments Commission (ASIC) commissioner Greg Medcraft (pictured).
Medcraft said there was nothing wrong with one professional body and he did not see why that would not happen in Australia, although he suggested that the challenge for the FPA was convincing the public about its brand and the quality of advice offered by members. He said that if the FPA could achieve that it could succeed in becoming the leading and, ultimately, only association in the industry.
Medcraft said the big challenge for the financial planning industry in general was gaining the trust and confidence of the community, adding that there was a “real business need to embrace change”. He felt that in order to achieve this, the regulators and industry groups such as the FPA needed to work in partnership. He added that this partnership was important because Government only sets the minimum standards.
“I think one of the problems with this profession is that a lot of the time it’s actually operated at the minimum and not the higher level,” he said. “Our system in Australia is a very free, open market system that relies on gatekeepers – financial planners are gatekeepers – and which relies on those gatekeepers to do the right thing.”
At a later forum, FPA chief executive Mark Rantall would not give a clear answer as to whether the FPA was actively engaging with the Association of Financial Advisers (AFA) with the aim of merging the two associations, stating that it was a matter for the FPA Board. However, he did say that the FPA regularly engaged with the AFA on various issues.
“The message I’m trying to get across here is that you can’t just ask to be a profession – you’ve got to earn it, and you’ve got to have the structure, the framework and the discipline in place to ensure that you earn the right to be called a profession,” Rantall said. “It’s the public that will determine that you are a profession. It’s not to say that there can’t be other associations that members feel they want to be a part of because they have a sense of belonging for a whole range of reasons.”
Medcraft asserted that the financial planning industry should lead the thinking around what reforms were needed, adding that the FPA’s announcement about minimum education requirements and the lifting of education standards was an example of this.
“It’s a very good example of where the industry should lead the thinking. I think that if you’re a good industry you should be able to have light touch regulation,” he said.
