FSR refinements good for planners and consumers, FPA says

24 May 2007

The Financial Planning Association has welcomed new federal government legislation that will ease the compliance burden on financial planners, making good financial advice cheaper and more accessible to the majority of Australians.

FPA chief executive officer Jo-Anne Bloch congratulated the government on taking proactive steps to help people get access to good financial advice.

“The government deserves a vote of thanks for listening to the concerns of FPA members when drafting this Bill,” Ms Bloch said.

“We have long campaigned that the compliance burden on our planners has made it difficult in many cases to make good financial advice affordable for everyone. This new legislation goes a long way to breaking down those barriers and cutting red tape.”

Ms Bloch said the Simpler Regulatory System package, announced during Financial Planning Week by the Parliamentary Secretary to the Treasurer Chris Pearce, included several critical improvements. Financial planners will not be required to produce detailed and costly Statements Of Advice where the investment is less than $15,000, or where advice does not involve recommendations of a product, or where no remuneration is received.

This will ensure that FPA practitioner members can help Australians who:

• want advice as to how they can consolidate multiple but small super accounts
• cannot afford advice because of difficult circumstances
• simply want a bit of guidance and don’t necessarily have any money to invest

“Recent research carried out by the FPA for Financial Planning Week indicates that 73 per cent of Australians have experienced some financial pain. Getting good advice is a very big step forward in addressing this,” Ms Bloch said.

“Australians must get smarter with their money habits. Financial planners have been burdened with excessive compliance costs which have prevented them giving good advice to everyone.”

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Note to journalists

The Financial Planning Association of Australia (FPA) is the peak professional body for financial planning in Australia. The FPA has a network of 31 Chapters across the country, which provide a focus for business networking and professional development activities for more than 12,000 members. FPA practitioner members manage the financial affairs of more than 5 million Australians whose investments are valued at $630 billion.