Thu, Jun 13, 2024

The official Financial Regulation Journal of SAIFM

Should financial planners be individually registered?

The Financial Planning Association has called on the government to take the opportunity to strengthen it’s proposed approach to implementing Hayne Recommendation 2.10.


  • Hayne Recommendation 2.10 recommended the establishment of a single disciplinary body for financial advisers and that all financial advisers who provide personal financial advice to retail clients should be registered.
  • Consultation on a draft Bill proposing to implement the government’s response to this recommendation recently concluded (14 May 2021). You can find a summary of the proposed measures in Governance News 21 April 2021 at p15.

An opportunity to strengthen the proposed approach?

The Financial Planning Association’s (FPA’s) submission to the Treasury’s consultation is broadly supportive of many aspects of the proposed approach including measures intended to streamline existing processes and address duplication such as the proposal to wind up FASEA and ‘remove the redundant oversight of the Tax Practitioners Board’.

The submission is also broadly supportive of the proposal to establish a disciplinary function based on the Financial Services and Credit Panels (FSCPs) within the Australian Securities and Investments Commission (ASIC).

Individual registration

The FPA’s submission does however include several recommendations to ‘improve’ the proposed approach including calling for the introduction of an individual registration model for financial planners (as opposed to the proposed model, under which registration of financial planners would be the responsibility of the Australian Financial Services Licensee (AFSL holder)).

Specifically, the FPA recommends that:

  • the proposed registration requirement for financial planners be redrafted as a personal responsibility for financial planners
  • applications for registration/renewal should be submitted by individual financial planners (not the AFSL holder)
  • professional registration should not be tied to employment or authorisation under an AFSL

The FPA argues that individual registration is a better approach because it would underline individual advisers’ commitment to high professional standards, thereby lifting standards across the sector. The FPA also considers that the introduction of individual registration is ‘central’ to Hayne recommendation 2.10.

The FPA states,

‘The creation of a personal registration is an essential component of any professional framework and is commonplace in professions as diverse as health practitioners, lawyers, architects and tax agents. A personal registration becomes a valued symbol that a practitioner has completed their professional qualifications, is in good standing in the community and whose behaviour is guided by adherence to the profession’s ethical principles. The benefits of registration are largely lost if it is tied to a financial planner’s employment, duplicates the authorisation process and is treated as another administrative task to be completed by their licensee’.

Further to this, FPA CEO Dante De Gori commented individual registration has benefits for consumers.

‘A true professional registration will have flow-on benefits for consumers as it will improve the quality of the information on the Financial Adviser Register and ensure anyone can easily check the qualifications, registration status and disciplinary record of their financial planner. Establishing a professional registration for financial planners is a perfect opportunity to build the Financial Adviser Register into the valuable resource that it could be’.

[Sources: FPA media release 19/05/2021Financial Planning Association submission: Single Disciplinary Body for Financial Advisers 14/05/2021]

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