FAAA denies Treasury claims it is ‘conflicted’

Mike Taylor

Managing Editor and Publisher

14 August 2024

The Financial Advice Association of Australia (FAAA) has hit out at and refuted claims in a Treasury consultation paper that the so-called professional associations pathway should be changed because the associations are conflicted.

The FAAA has denied a claim in the Treasury consultation paper that professional associations are unable to balance expectations to act in the interests of their members and being able to discipline those members.

The Treasury consultation paper expressed concern regarding: “perceived conflicts [arising] where professional associations may be perceived to balance the expectations to act in the interests of their members, while adequately regulating (and disciplining where required) those members”.

“It may not be possible to appropriately or adequately manage this perceived conflict in some circumstances,” it said.

”In refuting the Treasury suggestion, the FAAA pointed out that its professional complaints function is “ring-fenced” from other association roles.

Established under the FAAA conduct and integrity regulations, our disciplinary process was put in place as a formal mechanism to investigate complaints and other reports of misconduct against FAAA members. Decisions about whether an FAAA member has breached the FAAA Code and whether they should be sanctioned, are made by an independent Conduct Review Commission (CRC),” it said.

“The purpose of professional associations is to act in the public interest, uphold the reputation of the profession, and represent the interests of its members. Acting against misconduct is central to achieving this purpose.”

“In contrast to the assertions made in the consultation paper, professional associations embraced their disciplinary responsibilities of upholding professional standards. It is not in the interest of professional associations, their members, the profession as a whole, or the public to fail to uphold the professional standards they set,” the FAAA said.

Elsewhere in its response to the Treasury, the FAAA also questioned proposals to impose succession planning obligations on tax practitioners.

It pointed out that tax (financial) advice services provided by a financial advisers are different to tax agent services provided by an accountant.

“Accountants, as tax practitioners, offer different professional services to financial advisers,” the FAAA said. “As such, accountants play a different role, and interact differently with the financial system on behalf of clients, compared with financial advisers.”

“The provision of financial advice services is heavily regulated by ASIC under the Corporations Act 2001 licensing regime. Australian Financial Services (AFS) licensees provide financial product advice to clients and deal in financial products. They do not provide accounting type services.”