ASFA pushes for sole adviser industry body


By Elizabeth Somerville

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The Association of Superannuation Funds of Australia (ASFA) has advocated for a single professional body for financial advisers to create consistency in industry standards and keep a lid on costs.

In its Treasury submission in response to the Parliamentary Joint Committee (PJC) on Corporations and Financial Services, ASFA said that although it supported the recommendation requiring advisers to be members of an authorised professional association, it held concerns over the number of associations being established.

“One of our concerns with multiple professional associations is that this creates unnecessary duplication, the risk of different standards and greater risk due to lack of scale,” ASFA chief executive Pauline Vamos said in the submission.

“A single association regime would also have synergies that would be lost in a multiple association regime.

“Our concern is that any additional costs could be significant and will inevitably be passed on to the consumer in an environment where price is often an inhibitor to people seeking financial advice.”

Consistency among professional associations could also prove problematic, and more regulatory oversight would be required, Vamos said.

Although a single entity could appear monopolistic, “given the non-commerciality or need for competitiveness in the professional association arena we do not consider this to be a problem,” she said.

“We believe it is in the best interest of consumers and the industry for the government to adopt a single professional association regime.

“This being said, if the government opts for multiple professional associations, it will be essential that they are required to have consistent codes and standards.”

ASFA also raised concerns over the Professional Standards Council (PSC), the body that would approve professional associations, primarily the public perception “of limiting liability of financial advisers (and imaginably licensees), which is the cornerstone of the PSC model”.

Instead, ASFA suggested another agency such as ASIC be the approving entity, similar to how the Tax Practitioners Board approved associations in the tax advice sector.

“We would be supportive of such an approach only if it would apply the rigour that the PSC approval process applies,” Vamos said.

The two main associations representing the financial planning industry are the FPA and the Association of Financial Advisers. Smaller industry associations include the Association of Independently Owned Financial Professionals and the Boutique Financial Planners.

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