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.
Having worked in a Hybrid role where there was a mix between General Advice and Personal Advice provided by the same person but in differing context, it can be very confusing. I was putting myself forward as a Qualified Financial Planner, but unless you wanted to have personal advice I can only provide general advice.
To say this would be confusin
Someone is actually getting paid to discuss this kind of stuff? I have clients screaming out for a streamlined approach to advice so they can get stuff done but compliance is now taking up 90% of my time making sure I have repeated information enough times in my file notes, working papers, fact find, scoping, SoA and other bits and pieces. Let alone getting it through paraplanning and presenting. If there’s a slight variation we start the process again. This is costing the clients money and opportunity…….. Where is the discussion on this!!!! Meanwhile there are round table board meetings about using a specific term that should take minutes to clear up but no……we need a parliamentary joint committee on corporations and financial services to nut this out. No wonder an SoA is now 50 pages long with stuff in there the clients don’t care about and costs thousands of dollars. A client once read through an SoA and declined advice, because they could tell that the SoA was for us, not for them.
It’s like “ground hog day” !! Many advisers not just myself have been saying this for years just goes to show how much the legislators listen If they cannot work out the very simple solution to this information not advice then how are they ever going to get the rest of it right.
With all of LIFs complexity ridged and outrageous legislation they have no hope
I hope I’m still around in 2024 when they realise the mess they have made and try to reverse it
It happened in the UK but no one is taking any notice of that either
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