National planning standards gather pace

Australiais playing a leading role among 16 other countries associated with the International Organization for Standards (ISO) in developing an international standard framework for personal financial planning, according to Financial Planning Association (FPA) senior manager education and certification Ken Bruce.

“Australia has been a leader and not a follower in the whole process,” Bruce says.

The move to establish standards had its genesis in February 2001, yet has managed to slip beneath the radar of most of the industry until now.

Chairman of the Standards Australia Committee for Personal Financial Planning David Williams, the Australian representation to the international committee, says that “there’s a time and a place for everything, and the time for establishing financial planning standards in Australia hasn’t yet come. However, we’ve got all the right people interested to make sure the time will come,” he says.

Those right people, or associations to be exact, include the FPA, Certified Practising Accountants Australia, the Institute of Chartered Accountants, the Securities Institute of Australia, the National Institute of Insurance Brokers, the National Finance Industry Training Advisory Body and the Association of Superannuation Funds, all of which are on the committee.

The Australian Securities and Investments Commission (ASIC) and the Australian Consumers’ Association (ACA) have open access to the work.

Bruce believes while the standards process, particularly the ISO process, is a long and slow one, it is very worthwhile and can only be positive for the industry and ultimately lead to its growth and expansion.

“What we’re finding is that the process of establishing standards is reinforcing much of the work already achieved by the FPA in the past,” he says.

If the ISO and Standards Australia plans come to fruition, the result will be a completely voluntary standard, but one which is seen as independent of any one organisation that can add clarity to the profession of financial planning.

“Establishing the standards will be seen as confirmation of the financial planning industry as a completely independent profession,” Bruce says.

According to Williams, establishing the standards will be the next stage of evolution for the financial planning industry in Australia, particularly in terms of how it is viewed by consumers.

“Establishing a set of national, and ultimately international, standards of exactly what the financial planning process is, will help consumers realise what financial planners do,” Williams says.