The Financial Planning Association (FPA) says the regulatory system for financial planners in Australia should be a co-regulatory model.

Chairman Corinna Dieters says the vision is for a co-regulatory model in which the regulator and professional associations, such as the FPA, work together.

“It shouldn’t be just the regulator imposing their views on us,” she said.

Speaking at last week’s Financial Services Education Agency Australia conference in Sydney, Ms Dieters said the regulatory pendulum has gone too far and it’s time to address this.

She says the Financial Services Reform Act (FSRA) has its flaws, but it was a bold move for Australian regulation. “I’ve just come back from the US, and regulation there is an absolute nightmare.”

Ms Dieters says there are problems with the amount of prescriptive detail required in the FSRA. “Regulation needs to be considered in a more fluid, static sense to address different business models and changes in the environment it operates.”

She believes the planning sector is achieving more recognition through professionalism but more needs to be done, especially after the damage caused by the Westpoint case.

“We are on the cusp of being recognised as professionals,” she said. “We can talk about it as much as we like but it’s largely down to our actions.

“The horse has bolted on Westpoint. We’re now in an environment where there’s much more criticism and focus on financial planning. That has given us renewed energy.”

Ms Dieters says the co-regulatory approach is a more mature one and will help to build consumer confidence, create a better understanding of compliance needs and offer a better mechanism for dealing with those who transgress.

“We are serious about this model and will deal with those who don’t meet its high standards. We would all agree we need principles-based guidance.”