Financial Planners to Come Under Regulator’s Net 

  • Jun 12, 2020 AEST
  • Team Kalkine
Financial Planners to Come Under Regulator’s Net 


  • Under a new five-year policy platform, FPA has proposed a major overhaul of the AFSL system, recommending individual registration for financial advisers.
  • The recommendation is designed to promote financial planners taking responsibility for their qualifications and compliance with their professional standards.
  • The five-year roadmap is based on three pillars - members, advocacy, and the benefits of advice to consumers.

The Financial Planning Association of Australia, also known as FPA, has started working towards a new five-year policy platform, focused around three pillars - advocacy, members, and the benefits of financial planning to Australian consumers.

The policy platform has 19 crucial reforms, designed to lessen regulatory duplication for financial planning professionals, support more people to access financial planning and reduce cost of advice.

As the new policy suggests a professional registration for individual financial planners, if enacted, it would overhaul the present system that needs an Australian Financial Services License (AFSL) to offer financial advice.

FPA CEO Dante De Gori CFP agreed that AFSL is significant and has a crucial role in financial products and services regulation. However, latest reforms have directed the administration of financial guidance at the individual practitioner level. And, it recognises the connection between a client and their financial advisor is personal and not between the client and an AFSL.

The FPA CEO further stated that the AFSL system should be kept to offer administrative oversight of some financial services and products. However, the future management of financial advisory services should happen through personal registration and supervision without the need of AFSL for a financial advisor to offer guidance to its clients.

Personal registration is a new and unique concept for financial planning, and it is different from individual licencing under the existing AFSL system.

FPA is suggesting crucial changes to draft regulations for the financial planning profession. The modern financial planning is intended to be much more than product recommendations, and there will be a variety of topics that will be covered by the offered guidance. It will include different types of advice in the future.

Mr Dante De Gori advised amendment in the law to classify the financial product regulation from financial advice regulation.

The roadmap and policy platform rolled out for the next five-year period by the association has received support from members, while initiating a productive talk with industry stakeholders.

10 financial stocks for financial crisis - CGF, BEN, JHG, PNI, PTM, PDL, IFL, HUB, AMP, MPL Must Read

In this backdrop, let us discuss few ASX-listed stocks in the related space.

HUB24 Limited (ASX: HUB)

HUB unites advisers and their clients through innovative resolutions that generate opportunities. The firm is focused on the delivery of its award-winning investment and superannuation platform and growth of its subsidiaries, namely Paragem Pty Ltd and Agility Applications Pty Ltd and HUBconnect Pty Ltd. The platform offers a range of product choice and a unique experience for investors and advisors.

On 12 June 2020, S&P Dow Jones Indices announced June 2020 quarterly rebalance of the S&P/ASX Indices, resulting in the removal of HUB from S&P/ASX 200 Index, effective on 22 June 2020.

March Quarter Update - HUB24 announced the March quarter update during late-April, reporting robust net inflows of AUD 1.4 billion for the reported period, up 72% from same period a year ago. FY20 average monthly net inflows stood at AUD 429 million as compared to the FY19 average monthly net inflows of AUD 324 million.

Funds Under Administration (FUA) for the March quarter declined by AUD 2.1 billion to AUD 15.1 billion, down by 13.1 per cent since 31 December 2019 due to unfavourable market shift. FUA on the HUB24 platform is not entirely related to shifts in equity markets.

As per the latest available Strategic Insights data for the Australian platform market, HUB has maintained second ranking for both quarterly and annual net inflows. Market share has also risen from 1.3 per cent to 1.75 per cent from last quarter. The quarter added new 115 advisers to the platform, and 27 new licensee contracts were inked.

Image Source: Company's announcements

The firm has many achievements under its belt - it is on top in terms of IT/Web functionality, while in the Wealth Insights Platform Service Satisfaction survey, it was awarded equal first out of 15 platforms.

It has received awards for Product Offering and Integration and identified as the industry leader in the managed portfolio space. In the March quarter, 26 new managed portfolios were added to the platform, a combination of equities and diverse asset classes. Furthermore, it included the new Milliman SmartShield Portfolio range, which is the current exclusive offering from HUB, providing protection to investors during the period of market volatility. Seven new international ETFs were included, with the total now at 87.

ClearView Wealth Limited’s new Whitelabel IDPS and Super products were launched in the quarter. In the wake of the ongoing pandemic, HUB activated the business continuity plan, with the teams working remotely to offer services to the clients.

On 12 June 2020 (AEST 03:11 PM), HUB was trading at AUD 10.710, down by 4.8 per cent from its previous close, with a market cap of AUD 707.02 million.

AUB Group Limited (ASX: AUB)

AUB Group is Australasia’s biggest equity-based insurance broker network, managing approximately AUD 3.2 billion GWP across 93 businesses, offering service to 600,000 clients and more than 1 million policies across over 450 locations.

As per the June 2020 Quarterly Rebalance by S&P Dow Jones Indices, AUB will be added to S&P/ASX All Australian 200 Index on 22 June 2020.

Third Quarter Trading Update - AUB performance in Q3 remained robust across its diverse portfolio. In Q3, adjusted net profit after tax stood at AUD 9.2 million, an increase of 25 per cent against FY19. Year-to-date adjusted net profit after tax was noted at AUD 30.5 million, up by 25 per cent.

Image Source: Company's announcements

Key Highlights:

  • Premium rates up by 6.3 per cent.
  • Strong balance sheet and liquidity with cash and debt headroom of AUD 82 million at 31 March.
  • Austbrokers Express Cover launched in March.
  • Cost reduction program continues.

AUB’s Group CEO and Managing Director, Mike Emmett stated that the Company understands the challenges that few of its clients are experiencing, thus it will work with them closely. The strong liquidity and financial strength of AUB position the Company well during this challenging period.

The Company has appointed Mr Ben Bessell as Austbrokers Chief Broking Officer, effective 13 July 2020. He has an experience of more than 26 years in general insurance and served at various senior roles at IAG Limited including as an Executive General Manager Business Distribution and CEO of CGU.

On 12 June 2020 (AEST 03:28 PM), AUB was trading at AUD 13.180, down 5.655 per cent from its previous close, with a market cap of AUD 1.03 billion.

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