Speaking at the Boutique Financial Planners’ annual conference in Brisbane this week, FPA general manager for policy and conduct Dante De Gori poured cold water on ASIC’s proposal for a UK-style ‘restricted’ advice category, citing the need to review the definition of independence.
In its second submission to the Financial System Inquiry, ASIC proposed that institutionally-aligned advisers be labelled as ‘restricted’ in order to safeguard consumers from the “inherent conflicts of interest” within vertical integration.
“My concern is that we’re just adding another band-aid to the problem,” Mr De Gori said.
Firstly, ‘financial product advice’ as it is defined in the Corporations Act should be questioned, he said.
Second, before the government considers introducing a ‘restricted’ category, the Corporations Act definition of ‘independence’ when it comes to financial advice should be reviewed, Mr De Gori said.
“Is it still fit for purpose today? Why aren’t we looking at that first?” he asked.
Mr De Gori said he was also concerned about the “negative connotation” associated with the word ‘restricted’.
“And in the UK, those advisers that weren’t restricted have to broker the whole market,” he said.
“So if you’re [an IFA] in the UK, you have an obligation to broker the whole market when you provide advice. What would be the implication of [that in Australia]?”
FPA chief executive Mark Rantall previously told ifa that the association was yet to formulate its policy response to ASIC’s submission but that his initial reaction was that the proposal may go “too far”.
Agree with you Margaret. God knows why any FP would want to support the FPA. I predict if they don’t go under from crippling this once great industry then those advisers left will one day figure out just how the FPA has deserted them (& slyly feathered their own nest at the cost of this industry) then just stop paying their membership & stop doing their outrageously expensive courses.
…so instead of financial advisers changing their business model to be able to satisfy the definition of independence, you suggest the definition is changed itself…to benefit financial advisers.
The media are going to have a field day with that Dante [shake of head].
The Corporations Act doesn’t need to change Dante – your understanding of what “client first” truly means needs to change.
Is there a Stuff and nonsense division in ASIC?
If ASIC declare me restricted, I’ll BOLR and start again as independant. And so will anyone vertically integrated whose not a few years off retirement. Can you imagine having the title, ‘Financial Planner ( Restricted )’ next to your name?
On all my documents to a client, I’m licenced by xyz is clear to see to everyone… except maybe ASIC 😉
Onece again the FPA prove that they are beholden to the banks and institutions who own 80% of advisers. Stuff this my CFP is worth nothing, is the AFA the alternative voice for those of us that recommend products that suit our client not our licensee!!!
Let me guess what the solution is Dante…..EDUCATION? Could it be that one of your ‘online’ courses for $900+ could be a convenient fix? How about we just give the FPA money and move on.
The proposal should also include Industry funds as they are the extreme case of being restricted