1. 1  catch-up on ongoing international developments Australia (FOFA) UK (RDR)  other international discussions who is a “financial planner”? CFP Board disclosure recommendations IOSCO suitability consultation Agenda

2. 2  … and there’s nothing wrong with that!  of course, we would never do everything just because others do it … Our Regulators tend to follow …

3. 3  what is it all about? ban conflicted remuneration structures (including commissions and volume based payments) statutory fiduciary duty: act in best interests of clients introduce “adviser charging” (clear and product neutral; opt-in) percentage-based fees only on ungeared products expand availability of low-cost “simple advice” stronger powers for regulator  when? 1 July 2012 1 July 2013: ban on risk commission (within super) Australia

4. 4  RDR aims to ensure that: consumers are offered – transparent and – fair … charging system for the advice they receive consumers are clear about … the service they receive; and consumers receive advice … from highly respected professionals UK

5. 5  To achieve this, new FSA rules will require: advisory firms to: – explicitly disclose and separately charge clients for their services; – describe their services as either independent or restricted; and individual advisers to: – adhere to consistent professional standards, including a code of ethics.  when? 31 December 2012 UK

6. 6  intermediary remuneration review consultation with industry bodies questions around: – intermediary services and advice – independence (relevant?) – fee-based advice (commission banning? prescribed fee basis? annual renewal?) – risk business remuneration? – how low-income market differs The Link to us back home…

7. 7  who is a “financial planner”? most progress in Australia – currently: law requires effectively 3 months’ worth of study – ASIC proposal: “knowledge update review” every 3 years – FPA from 1 July 2013: new members to have undergrad degree – recognition of term “financial planner”: government to legislate mid 2013 (require prof body membership? cf. US coalition opposition) Other international discussions

8. 8  CFP® Board proposals to SEC: simpler disclosure in 4 focused areas: – conflicts of interest – fees and costs – planner’s background – scope of representation must make the above prior to engagement plain English, in writing and available electronically Other international discussions

9. 9  International Organisation of Securities Commissions suitability requirements for complex financial products – advisors to classify clients: retail or non-retail – general advisor duties: * act honestly, fairly and professionally * manage conflicts of interest – sufficient disclosure to enable client decisions – client protection to exist even if sales-only transaction – advisor to ensure recommendations are based on assessment that product matches client’s experience, knowledge, investment objectives, risk appetite and capacity for loss – advisor must have sufficient info before making a recommendation – must have staff polices that remove incentives to recommend unduly complex product IOSCO Consultation