“Individual financial planners don’t have a relationship with ASIC. Individual financial planners often don’t have a relationship with the Tax Practitioners Board and other regulators,” Mr Marshan said.

“Therefore, in our experience, individual financial planners who don’t have that individual professional obligation won’t necessarily fully understand all their regulatory obligations, all their requirements.

“We think it’s an important step to foster professionalism for the individual to be individually accountable including the registration process.”

Mr Marshan noted that, ultimately, the practitioner and the relevant provider is the one who is sitting in front of the client and providing the advice. 

“Right now under the Corporations Act, the obligations of the licensee and the obligations of the representative are so intertwined that I think there needs to be a process to consider which bits sit more appropriately with each party,” he noted.

“Therefore, in terms of the obligations that should sit with the individual practitioner, those should be the ones that are related to understanding the client, recommending advice that’s in the best interests of the client, and ensuring that it’s documented in an appropriate way that is clear, concise and effective and that it’s implemented in the right way.”

There are also a lot of services that licensees are providing at the moment that provide not only incredible value to the professional providing the advice, but also protections to the consumer, according to Mr Marshan.

This includes services such as monitoring and supervision and making sure that the products that are recommended are appropriate, having complaint mechanisms in place.

“Some of these things are things that licensees are well placed to provide,” he said.

“We think there are natural separations there in relation to what the planner does in front of the client and everything else that happens behind the planner, and there are probably some natural separations there.”