The Financial Planning Association (FPA) has addressed industry concerns regarding its recent proposal to replace the current Australian financial services licence (AFSL) system with individual registration through a single disciplinary body.
Following its recommendation last week that the requirement for financial planners to operate under AFSL to provide advice be replaced with a more bespoke system focused on individual registration, the FPA clarified the potential impact of a new system on licensees.
“One of our policy positions is that the future regulation of financial advice should occur through individual registration and oversight, rather than an AFSL system. This has triggered important discussions among the industry as we work together to create a better operating environment for financial planners and their clients,” FPA chief executive Dante De Gori said.
“Individual registration is an innovative concept for financial planning but not for other professions. It should not be confused with self-licensing or individual licensing under the existing AFSL system, which would still result in a duplication of regulation and unnecessary costs for financial planners.”
De Gori noted licensees under the new system would still be required to provide services to financial planners in key areas, including business development, technology and education.
“Removing the AFSL requirement for financial planners won’t change this,” he said.
“The AFSL does not make the planner, just as the hospital does not make the doctor, nor the law firm the lawyer. Individual financial planners are the ones who provide financial advice and the regulatory system should focus directly on their professional qualifications and behaviour.”
Last month, the FPA announced changes to its strategy and corporate structure, reflecting a shift in focus for the professional body.
