The proposed model includes important reforms that are at the core of the FPA’s policy platform — Affordable Advice, Sustainable Profession — including removing duplicate professional standards applied by the Tax Practitioners Board (TPB) and creating a disciplinary function with the powers and expertise to directly respond to misconduct.

“This is a major reform which will have a lasting impact on our profession, our members and the consumers they advise,” FPA CEO Dante De Gori said.

“The FPA has long advocated for the need for reform to reduce duplication and rising costs facing financial planners. We welcome the recognition of this in the draft legislation, with the proposal to wind up FASEA and removing the redundant oversight of the TPB being important steps in achieving this goal.”

However, Mr De Gori said it is crucial to not get the process wrong and ensure the success of the proposed model.

The key recommendation for this draft model is to create a true professional registration which is a personal requirement for all financial planners.

In the proposed model, the changes make the registration of a financial planner the responsibility of their AFSL. Mr De Gori noted the registration is then contingent on the planner’s ongoing engagement by the AFSL and effectively duplicates the existing authorisation process.

The FPA argues that a professional registration should demonstrate that an individual has met their professional requirements, is in good standing in the community and is ready to serve their clients.

“A financial planner’s registration should then follow them throughout their career and be a valued symbol of their professional status and commitment to uphold professional values. The creation of a personal obligation to register is an essential component of any professional framework,” Mr De Gori said.

“It’s the missing piece to the puzzle. Similar to the legal, medical or architectural professions, the FPA strongly supports a model in which registration is the personal responsibility of each financial planner and is not connected with their employment or authorisation under an AFSL.

“A true professional registration will have flow-on benefits for consumers, as it will improve the quality of the information on the Financial Adviser Register and ensure anyone can easily check the qualifications, registration status and disciplinary record of their financial planner.”

Establishing a professional registration for financial planners is a perfect opportunity to build the Financial Adviser Register into the valuable resource that it could be, according to Mr De Gori.

The FPA has also recommended some improvements to the proposed reform relating to the TPB. While the proposed reform is positive and addresses obvious duplication, the current drafting does not meet the government’s intention of creating a single set of professional standards for financial planners and a single regulatory regime. 

The FPA stated that it recommends that the draft bill remove the requirements for AFSLs and corporate authorised representatives (CARs) to register with the TPB.

“The FPA continues to believe that the best outcomes for both financial planners and consumers come about when the government and the profession work together on the issues that we are facing,” Mr De Gori said.

“We look forward to continuing our discussions with the government on the issues most critical to our members. We strongly encourage our members to keep sharing their feedback on what further support they need so we can continue to build a thriving profession.”

This comes as the SMSF Association had also recently made its submission voicing concerns of the supporting role ASIC will play and the increasing cost burdens that could be levied on advisers when it comes to the implementation.