This is all part of the government’s Future of Financial Advice (FoFA) reforms. Of the course the Financial Planning Association of Australia (FPA) has had professional practicing standards incorporating these standards for many years, but it is good to see the Government and the regulator finally getting on board.

It is also interesting to see the consolidation and/or disappearance of financial planning practices that can’t see themselves grappling with the issues of actually telling their clients how much they have been charging for services they have not been delivering. And then there are those who claim some entitlement to volume-related sales commissions for financial products they “sell” to their clients under the guise of professional advice. Please,  give me a break!

Despite all the positive changes to financial services regulation, we still grapple with the reform of education standards that apply to Financial Planners. There is still one base education standard at less than Diploma level that applies to anyone who gives advice at any level in the industry – that is, from the base level telephone customer service person to the holistic Financial Planner.

The government is considering enshrining the terms “Financial Planner” and “Financial Adviser” into legislation as a consumer protection mechanism, and restricting the use of the term to those who are appropriately qualified to give holistic advice. I suggest that the Minister had better enshrine something about education standards or membership of a bona fide professional association like the FPA, which already has a degree based education standard.   

Giving consumers clarity around fees and commissions is a positive step forward; now, it’s time for more clarity around the educational standards of those who advise them.