Financial Services Minister Bill Shorten has delivered on his promise to enshrine the terms ‘financial planner’ and ‘financial adviser’ in law.
The Minister has released draft legislation and an explanatory memorandum which cover the Government’s intention to legislate these and/or similar terms. In a release accompanying the draft legislation, Mr Shorten said this measure “… will ensure that only persons authorised to give personal financial advice to retail clients can hold themselves out to be a ‘financial adviser’ and ‘financial planner’ (or use terms of like meaning).”
Minister Shorten added that the measure will also help to protect consumers from “product spruikers” who might hold themselves out to be authorised financial advisers when they are not, and that it empowers consumers of finance services to be able to identify genuine providers of financial product advice.
The Financial Planning Association has been quick to add its support to the draft legislation and its intent. FPA CEO, Mark Rantall, commented, “This is a fundamental public confidence issue. Only 1 in 5 Australians currently get financial advice and some of this is due to consumers not knowing who to trust. Consumers deserve the right to differentiate between a qualified, professional financial planner and anyone who happens to hang out a shingle calling themselves a financial planner.”
This legislation should put a stop to those bad apples who have misled the Australian public and tarnished the profession…
Mr Rantall added, “Whilst FPA members hold some of the highest educational and ethical standards in the industry, there are those in the industry who call themselves financial planners but are seemingly unaware of the specific competency, training, licence, professional standing and services provided. This legislation should put a stop to those bad apples who have misled the Australian public and tarnished the profession by wrongly using this title.”
Association of Financial Advisers (AFA) CEO, Richard Klipin, also praised the Minister for the legislation, and acknowledged the consultative approach the Government had taken.
“What the industry now has is a very practical solution which will help raise the perception of the financial advice profession and help restore consumer confidence in financial advisers,” Mr Klipin said. “We look forward to working with the Government to finalise this legislation and to see it passed by the parliament into law.”
New AFA President, Michael Nowak, also added his congratulations, saying it was a particularly good outcome for the financial advice industry. “Advisers can now use the term ‘financial adviser’, confident in the knowledge that consumers will understand that they are licensed or authorised to provide financial product advice.”
Public submissions on the draft regulations close on 21 December 2012.
Well done to the FPA for generating and then pushing the agenda to enshrine the term Financial Planner in law. Another step forward for the profession of Financial Planning.
I beleive it is currently illegal to provide fiancial advice without an AFSL or to be authorised under an AFSL. How does this move by Bill Shorten acheive anything?
Gee, L Wigginton, Can’t you grasp all these wonderful changes Bill is introducing. Only a little while back he mooted the piece of paper we had to sign to only act in the best interests of our clients. After forty years in the business that set me back a bit. I had to change my ways I can tell you. And now those property spruikers from every which where who bought 479 properties in three years without any money, usually 29 years old or so, and who now have weekly incomes of $ 100,000 will no longer be able to call themselves financial planners. Well what an almighty blow to them and their ilk. Good one Bill, you’re really swinging the iron glove. Every financial criminal from Back o Bourke to Spring Street Melbourne will be trembling in their boots.
Merv Gay
Whilst this may soothe some weary souls, it is nothing more than appeasement from some-one not personally qualified to comment on anything financial apart from union money.
Too many “financial planners” buy their accreditation through simple and easy to courses which are sold and promoted with little or any real value .
This is no reflection on “real” financial planners who are worth every penny!
Well, the jury is certainly out for me. I have been in my own practice for 15 years, been a risk specialist for 8 and have absolutely no interest in financial planning as I outsource that. I have not worried about completing my managed investment module because I agree that u go, do the course, never use it, but still call yourself qualified…yet, every single bit of my 8 years is quantified with tailored advice that has been done with great intent…but…today I was told by my dealer group that if I don’t complete managed investments, which I will NEVER use, i can no longer practice as an AR in that dealwe group. Devastated…over 15 million in paid claims, care about every single client, never give advice in manages investments,
bureaucracy gone flipping mad. Real planners dont get called “financial planners” just because they have passed ever module. Go ask a managed investment adviser who studied dfp2 to write a specialised risk plan….might have passed the module, passed the dealer groups criteria, but probably has no clue on any other area, that’s why us as a unique industry outsource to each other in our own speciality.
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