The legal enshrinement of the terms ‘financial planner’ and ‘financial adviser’ looks set to proceed, following a recommendation tabled in Parliament.
The Parliamentary Joint Committee on Corporations and Financial Services (PJC) has handed down its report following an inquiry into a Bill which would enshrine the terms ‘financial planner/adviser’ in law. In its report, the PJC recommended the Bill be passed without amendment.
Other recommendations in the report:
- The Australian Securities and Investments Commission (ASIC) should implement a grace period to help unlicensed practitioners change signage/documentation containing the restricted terms
- ASIC should include information on its MoneySmart website about what consumers can expect when they seek the services of a financial planner/adviser
The Coalition said it remained sceptical about the proposal but would not oppose the passage of legislation.
The Bill was tabled by Minister Bill Shorten in March, honouring his earlier commitment to introduce legislation to restrict the use of the terms ‘financial planner/adviser’ (see: Enshrinement of ‘Financial Planner/Adviser’ One Step Closer) .
The industry was largely supportive of the Bill, but some stakeholders questioned whether it went far enough. The Financial Planning Association (FPA) recommended that, in addition to the requirement that the person using the title of financial planner/adviser be appropriately licensed through ASIC, the person should also be a member of a professional body and adhere to code of conduct.
‘Australians deserve the best possible advice from the most qualified practitioners – and these practitioners should be bound by a professional framework that goes beyond the law and requires adherence to standards of conduct, ethics and education, which are specifically tailored to the provision of quality financial planning advice,’ the FPA said in its submission to Government on the legislation.
Riskinfo’s own readers were divided on the subject, with 50% saying they agreed with the FPA’s position, and 47% disagreeing (see: Advisers Split on Question of Compulsory Association Membership).
The Bill will now be subject to a vote in the House of Representatives.
