A number of industry associations are in favour of a change to the financial advice framework to incorporate individual registration as opposed to individual licensing, but have warned this may not be a realistic expected outcome of Treasury’s Quality of Advice Review.
“I liken this to a doctor. A doctor can choose to put their shingle up by themselves as a professional, work in a medical practice, work in a hospital or be a specialist and we think that as a profession we should be able to do the same thing,” Financial Planning Association chair Marisa Broome said during a panel session at the SMSF Association National Conference 2022 held in Adelaide last month.
“It doesn’t mean that the licensing role goes away altogether. [Instead] that could be a business decision or commercial decision about how you choose to be supported in the delivery of advice, but the advice is your personal obligation as a professional and needs to be recognised within that individual registration.
“[So] the commercial decision you make about whether you’re in partnership [or] you’re a single practitioner working in a larger licensee-type arrangement that’s offering you the commercial support and services, [that would be] your decision as a professional as to how you do business.”
Fellow panellist Association of Financial Advisers chief executive Phil Anderson pointed out in order for this to occur a fundamental change to the Corporations Act would be needed.
“The Corporations Act is extensively built around this concept of an AFSL (Australian financial services licence) so we should not think that this is going to change quickly,” Anderson noted.
“But ultimately if there is a better way of designing the financial advice regime, then let’s see that design and let’s have that debate about how we can do it better.”
Institute of Public Accountants advocacy and policy group executive Vicki Stylianou pointed out it unfortunately may not be a possible outcome stemming from the Quality of Advice Review.
“[It is] something we would have liked to have seen in the terms of reference, [but] the focus is on advice, not advisers and not the structure of the system,” Stylianou said.
“I think we’re all pretty much in agreement on individual registration and it would solve a lot of problems.”
