FPA chief professional officer Deen Sanders has moved to end speculation the advice association will amend its professional code of conduct to include a ban on asset based fees.
Sanders told InvestorDaily there was no truth to industry speculation that amendments to the association’s code would include banning the remuneration model for its members.
“No truth to that. It’s our strong view that remuneration and models have little to do with the concept of professional behaviour,” Sanders said.
“It’s not in our immediate generation of code moderation work that we’re looking at.
“The code is a living breathing document – it will always change and grow. We will be considering issues to the relation to the code. They will always be issues that relate to the issue of professional behaviour.”
If the FPA was to ban asset based fees it could result in its members no longer being exempt from the Future of Financial Advice’s opt-in requirements.
Sanders said if industry participants have made the link between the FPA and an asset based fee ban, it could have been made because of ASIC’s Shadow Shopper Survey.
He said the corporate regulator drew down on asset based fees in the findings of the survey.
While ASIC has made its view on asset based fees known, the FPA does not necessarily share the same view.
“I’m not convinced that the relationship is as significant in the report as claimed,” Sanders said.
In his view, the relationship is correlation not causation.
The FPA believe the most significant relationship is the failure to meet an obligation with the code.
“We see that as far more causational. You need to focus on the issue of behaviour,” he said.
“ASIC has been public about their view that asset based fees are something that they remain concerned about.
“That’s something that ASIC is entitled to say and have a view on and also something that the professional community should also debate.”
Meanwhile, the FPA released the consultation framework for a national curriculum and accreditation requirements for financial planning education in Australia.
Sanders said the decision to push for a national curriculum and accreditation requirement for the industry was, among other reasons, because the universities wanted to have a more formal conversation with the profession about what the requirements should look like.
“It’s been on the cards for quite some time mainly because what we’ve seen in financial planning education both higher education but also the RTO (registered training organisation) vocation education space is that a lot of the educational agenda has been driven by regulatory need,” Sanders said.
“Secondly it’s been driven by the different types of relations that different providers have with members of the profession. So for instance, some universities will have good relationships with the FPA, others speak to local financial planners and try and build programs like that.
“All of them have been in discussion with us over the years … 17 of the higher education providers already have CFP aligned programs.”
The consultation is open to all higher education providers and will run until 30 June.
