“Only when the tide goes out do you discover who has been swimming naked,” is Mark Rantall’s favourite Warren Buffet quote.
The CEO of the Financial Planning Association (FPA) told Wealth Professional
that the gravitational pull of consumer demand can’t be ignored and it will strip bare the stark difference between product sales and appropriate consumer-focused financial advice.
The need to formally distinguish between the two is especially pertinent in light of ASIC’s announcement
last Friday that it has directed two Commonwealth Bank of Australia (CBA)-aligned licensees to re-open compensation claims for 4,000 clients of shoddy practice.
After telling Wealth Professional
last week that the word “financial adviser” must be put into legislation, the FPA has revealed that it will be unveiling it’s 10-point plan to legally distinguish advice from product during a meeting at the senate inquiry into FoFA this Thursday.
“FoFA is an acronym we are all familiar with, but SoPA – or separation of product, advice – is the one to watch,” said Rantall.
He wants to see everyone, from the regulators, the legislators and the government, get behind the idea and support enshrining the financial advice profession into law.
“Anyone can call themselves a financial planner today – they could be selling property – and it’s just not where professional qualified financial planner are, and they deserve to have their title protected by law,” he said.
It’s also vital for consumer confidence and protection to be able to clearly tell the difference between those selling product and professional financial advisers.
With only 30 days left before the expected announcement from the government about its final form for FoFA on June 17, FPA is desperately pushing to put this “surgical cut” into legislation.
“Product in itself isn’t the issue provided it’s appropriate for the client, but before anyone should get anywhere near purchasing a product they need to have the right advice…We need to have a bipartisan approach to make sure that this happens,” said Rantall. “It’s not about extra regulation: it’s about financial planners being recognised for the great job they do, and consumers getting great quality advice.”