Give advisers whistle-blower protections says FPA

Financial planners are not accountants and should not be considered as such for the purposes of the Government’s changes to the anti-money laundering counter-terrorism financing (AML/CTF) laws, according to the Financial Planning Association (FPA).

Answering questions on notice from a Parliamentary Committee, the FPA warned that to impose additional AML/CTF processes on financial advisers would come at considerable cost and create significant confusion.

At the same time, the FPA has urged that financial planners be granted the same protections as whistle-blowers in instances where they report suspicious matters involving clients.

The FPA said that it would provide the advice profession with greater confidence if financial planners who identified and reported client conduct that required a suspicious matter report be made to AUSTRAC were “protected by the law to the same extent as whistl-blower disclosures under the Corporations and Tax Administration acts”

“Financial planners would incur the significant cost of undoing existing AML/CTF processes and controls, to put in place new systems and controls based on Tranche 2 requirements and reporting obligations,” the FPA said. “It will also significantly undermine cost-effective and efficient industry developed solutions to addressing ML/TF risks by financial planners, AFS licensees and Part A AML/CTF program reporting entities; and make the above ACIP/CDD guideline and forms redundant.”

The FPA claimed this would have a significant impact on financial planners, the majority of whom operate small businesses or are sole practitioners (nearly 90% of licensees have 10 or less financial planners operating under their licence).

The FPA is concerned that financial planners are being considered as designated non-financial businesses and professions (DNFBPs or ‘gatekeeper professions’), under the banner of accountants,” it said.

“Accountants offer different services to financial planners. As such, accountants play a different ‘gatekeeper’ role, and interact differently with the financial system on behalf clients, than financial planners,” it said.