Professional standards for financial planners

Key Points

• An advisory panel is addressing reforms for the competencies of financial planners
• The Institute says the accounting profession is well placed to provide valuable guidance
• Consultation on replacing accountants’ exemption continues as we endeavour to develop the most appropriate framework and settings.

The federal government has a plethora of financial services issues to address, which they continue to extensively discuss with stakeholders. While we await draft legislation on the Future of Financial Advice (FoFA) reform recommendations, there has been significant industry discussion over the competencies of financial planners and the most appropriate framework to oversee professional and ethical standards for the industry.

An advisory panel made up of representatives of the financial services industry, including the professional accounting bodies, is addressing these reforms.

The Institute’s Head of Financial Planning, Hugh Elvy, says there are a wide range of views on this issue. 'The accounting profession is well placed to advise in this area, having a long history of incorporating standards as part of a professional framework,' he said.

Accountants’ exemption

While there are still many issues to address regarding the replacement of the accountants’ exemption, it is important to reflect on our original starting point.

Initially, the government planned to remove the accountants’ exemption without replacing it with an alternative framework. This was also a recommendation in the Cooper Review, and was widely supported by various stakeholders in the financial services industry.

While we understood the limitations and perceived concerns of the accountants’ exemption, we believed it was critical that professional accountants in their day-to-day practice are permitted to deliver high quality, non-product financial advice. (Today, this aligns with the government’s view of the role of professional accountants.)

'We communicated this important message to the government, which is now, as part of the FoFA reform package, considering an appropriate replacement,' Mr Elvy said.

The process has been lengthy but it is critical to try to deliver both a practical and cost effective solution that will provide a wider range of professional advice to Australians.

Article last updated 3 August 2011