The Financial Planning Association (FPA) and Association of Financial Advisers (AFA) have urged the Government to recognise the term ‘financial planner/adviser’, but have differing views as to who should be allowed to use the title.
The FPA called for the use of the title ‘financial planner’ to be restricted under law following an FPA lunch in Sydney last week, at which Financial Services Minister Bill Shorten presented his views on the advice industry.
FPA Chairman, Matthew Rowe, said that only those people who were members of an “approved professional association” should be allowed to use the title. The call comes after 94% of FPA members voted in favour of the proposal to transition the FPA to a professional association in the next three years.
In response, the AFA issued its own statement, saying it had been arguing a similar position for the regulation of financial advice terminology since 2009. However, the AFA believes the term ‘financial planner/adviser’ should be restricted to those operating under an Australian Financial Services License (AFSL), and does not believe that the restriction should apply only to one association.
AFA President, Brad Fox said that in the interests of consumers, it is very important that members of the financial advice community’s various professional associations are seen to be cooperative, supportive and respectful of each other in raising public perception around financial advice.
It’s a combination of behaviour and education that will change consumer perception, not a sticker or badge that says you belong to one association or another
“It is a combination of behaviour and education that will change consumer perception, not a sticker or badge that says you belong to one association or another,” Mr Fox said.
“To see that consumers are better served, we believe the focus should firstly be on ensuring sensible FoFA outcomes, rather than pursuing self interests,” he said.
Both associations agree that legal recognition of the title is critical to the protection of consumers.
CEO of the AFA, Richard Klipin, said: “We believe the fundamental issue is consumer protection – consumers who engage an adviser working under an AFSL have rights and protection. Until this distinction is enshrined in law, those who do not act under a financial services licence will continue to operate and consumers who use their services will continue to be at risk.”
The FPA’s position, as articulated by Mr Rowe, is that: “Similar professions that deal with matters of public interest, such as tax agents and stockbrokers, have the force of legislation behind them and we believe financial planning should be no different.”
