The Financial Planning Association has welcomed Michelle Levy’s handing down of the final report of the Quality of Advice Review to the Government, and eagerly awaits its findings by the Financial Services Minister, Stephen Jones.
FPA CEO, Sarah Abood, said it is crucial the Minister moves quickly to reduce the regulatory burden that financial planners are under, which has seen significant cost added to the profession over the past 10 years.
“The Review is a critical opportunity to reduce the cost of providing advice in Australia and improve the ability of Australians to get access to high quality professional financial advice.
“While we are waiting to see the final recommendations, our members were encouraged by those made in the Proposal Paper earlier this year, including a more principles-based approach to regulating the provision of financial advice.
“The FPA believes the regulatory costs of providing personal advice must come down, to help improve the affordability of advice for consumers and ensure there is a level playing field for the regulatory requirements and standards imposed on advice providers.
“Further, the regulatory environment should facilitate the provision of simple personal financial advice to clients in an affordable manner by financial planners and financial planning practices, to meet consumer demand.”
The FPA says new regulatory requirements must:
- build consumer trust in the different types of advice services and benefits through high standards, appropriate education and training, effective requirements and accountability, and transparent regulation of the provider, applied consistently across the financial services sector,
- reduce input costs into the provision of financial advice,
- facilitate an increase in financial advice providers,
- ensure active accountability for all financial advice providers,
- maintain consistent consumer protections across the profession, and
- be fair and equitable.
Ms Abood adds the impact on competition in the financial advice market must be a key consideration when examining the current legal obligations and making recommendations for regulatory change, and must not provide a structural competitive advantage to one type of provider over another.
“Importantly, only ‘relevant providers’ who meet the professional standards should be legally permitted to use the terms financial planner and financial adviser and like terms,” she says.