April 4, 2019
The Financial Planning Association has called for the term ‘general advice’ to be replaced by the term ‘general information’.
The FPA’s renewed call for the removal of ‘general advice’ as a descriptor follows the recent release by ASIC of research that reveals confusion among consumers between what constitutes personal and general advice (see: Consumers Confusing General and Personal Advice).
In declaring that ‘general advice’ should not be labelled advice at all, the Association has also recommended that the terms ‘financial advice’ and ‘financial product advice’ should only apply to personal advice as defined by the Corporations Act.
It says the regulator’s findings highlight there is significant confusion among consumers – and elsewhere – about the definitions and roles of a qualified financial planner who provides personal advice, and institutions and non-qualified individuals who simply sell financial products.
Trusted and transparent financial advice is the right of every Australian
FPA CEO, Dante De Gori, said: “Trusted and transparent financial advice is the right of every Australian. And whilst it is extremely important that more Australians seek advice, it’s just as important they know what they’re getting.
“Financial advice should ONLY mean financial advice,” said De Gori, who added that anything else should not be labelled advice.
The Association says it has consistently called for the separation of financial advice from financial product marketing and product information, noting the Financial System Inquiry’s Final Report in December 2014 adopted the same position, while the Parliamentary Joint Committee on Corporations and Financial Services also came to a similar conclusion on this issue, and a Productivity Commission recommendation released in August 2018 also urged the Government to clarify the law between the two forms of advice.