In the past week alone, a number of changes have occurred: Financial Services, Superannuation and Corporate Law Minister Chris Bowen flagged plans to release an options paper aimed at streamlining product rationalisation; planning groups voiced their opinion to the parliamentary inquiry into financial services and the FPA revamped its code of professional practice.
Bowen used his speech at the Investment and Financial Services Association (IFSA) conference earlier this month to declare that issues of product rationalisation need to be resolved.
“The options paper will form the basis of a round of consultation, which will better inform me of the industry’s best way forward,” he said.
It is understood the paper will attempt to deal with old legacy products, particularly around life insurance and product rationalisation.
“This is a complex issue and any mechanism must have appropriate integrity measures, but I am confident that an appropriate and workable solution can be found,” Bowen said.
Similar issues surrounding product rationalisation were also at the forefront of many industry participants’ minds recently.
In a last-minute rush, a number of large advice firms lodged submissions to the parliamentary joint committee’s inquiry into Australia’s financial services.
Professional Investment Services (PIS), MLC, Commonwealth Bank of Australia and Guardian Financial Planning alongside the Financial Ombudsman Service, CPA Australia, IFSA, the FPA and Association of Financial Advisers all lodged submissions to the committee.
For the advice firms, the big ticket items, aside from remuneration concerns, are greater monitoring by regulators of advice firms that sail too close to the wind.
“To this extent it is important to note that the regulatory system cannot guarantee against corporate failures or prevent poor business or advice models that systemically lead to losses,” PIS wrote in its submission.
“The system also does not have the capacity to legislate away greed. What it can, however, do is work together with key stakeholders and market participants to promote market integrity, good corporate governance and facilitate consumer understanding through improving system safeguards and increasing the professionalism of those providing advice.”
Greater consultation between regulators and associations is the key to change, many participants said.
Meanwhile, change has occurred within the FPA, with the association overhauling its professional standards, bringing three of its codes under one banner.
The Code of Ethics, Practice Standards, and Definitions and Guidance will be brought under the Code of Professional Practice.
The code has not been changed in 12 years, according to FPA chief Jo-Anne Bloch.
“This is an opportunity for the FPA to set the industry standard for professional financial planning in Australia, and it demonstrates that FPA members have signed up to high standards of professional practice and conduct,” Bloch said.
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