FPA welcomes the opportunity to demonstrate the value of professional financial advice

09 Jul 2008

The Financial Planning Association of Australia (FPA) will actively participate in any review of the superannuation system, as suggested by Senator the Hon Nick Sherry, Minister for Superannuation and Corporate Law.

“For too long the remuneration debate has been distracted by misinformed, often vested interests that seem intent on scaring Australians away from accessing the professional advice that is so desperately needed," said Deen Sanders, Deputy Chief Executive of the FPA.

Seven out of ten Australians do not get advice at the moment. There is an underinsurance gap. Australians are nervous about the economy, the markets, and their superannuation fund performance, as highlighted in FPA research conducted earlier this year - and there is a looming retirement savings gap as outlined by IFSA in their recently released “National Savings” Report.

“The FPA has long held the view that affordable advice has been elusive for many Australians. Any review that deals with all the issues that have served to undermine good advice is going to be of great benefit to everyone, because it will improve understanding about the way financial planners work, the benefits of professional advice and also the rights of consumers,” he said.

Mr Sanders said: “The FPA has already put into place a professional framework to ensure that FPA members meet high standards. We already require the separation of fees for advice and fees for products through our Principles to Manage Conflicts of Interest, which are enforceable. We have a Remuneration Committee looking into definitions, payments, and benefits, and we will bring all of this work to the review.”

All FPA members are very clear that they are required to separate fees for advice and fees for products.

Mr Sanders also noted that the FPA will be encouraging a good hard look at data provided by the regulators at the moment. "Improving the poor quality of data around costs to consumers will mean better information to improve the community's understanding of the value and costs of advice, and better means of comparing the various sectors,” he said.

“If we need to provide greater clarity to Australians on the various business models that exist, which includes remuneration structures, and that ultimately engenders greater confidence in the system, that’s a good thing and we welcome it.”

“Financial planners have for too long been blamed for all the failures and troubles in financial services and this has got to stop.”

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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.