The Financial Planning Association of Australia The Financial Planning Association of Australia

PJC recommends FPA’s call for enshrinement of “financial planner”

The terms “financial planner / adviser” are one step closer to enshrinement under law following the overnight tabling of a Parliamentary Joint Committee (PJC) report in Canberra.

The PJC was asked to review and provide a report on the benefits of enshrining the terms “financial planner / adviser” for Australian consumers.

The Government will now consider the report and its recommendations and decide whether to proceed with the passage of the Bill unchanged or make amendments. With the Coalition confirming that it will not oppose the Bill in parliament.

Mark Rantall, FPA CEO said: “The FPA applauds the PJC members and the report on enshrinement of “financial planner/adviser” tabled last night. This is a significant step in strengthening consumer protection and allowing consumers with better clarity in identifying a trusted professional. The FPA has led the pathway to professionalism in the financial planning industry and the protection of all Australians and our community believes that this legislation is a significant part of this.

In April 2011, the FPA originally called on the government to restrict the term “Financial Planner” under law for the protection of consumers. The Hon Bill Shorten released legislation for enshrinement in November 2012 and in March this year, government introduced legislation for “financial planner / adviser”.

Under the Corporations Act 2001, there is no constraint on individuals calling themselves “Financial Planners” irrespective of their training, competence, and even licensing. The proposed legislation states that only those fully licensed and authorised to provide personal financial advice can now call themselves a financial planner / adviser.

“The FPA welcomes specific recommendations made by the report to ASIC pertaining to enshrinement of “financial planner / adviser”, Mr Rantall said.

“In order for any piece of legislation to be implemented, an entire profession and industry needs to be behind it. The FPA welcomes the recommendation by the report to have ASIC, through MoneySmart, promote and communicate to consumers the benefits of enshrining the terms financial planner and financial adviser. We also support the recommendation to require ASIC to consult with industry about how to deal with short-term breaches and determine what time is needed to allow inappropriate usage of the term financial planner and adviser to be removed from all marketing material.”

The Coalition originally referred enshrinement to the PJC. It made a recommendation to not oppose the enshrinement provisions of the Bill and confirmed that it would not oppose the passage of the legislation.

“This is an historic day for financial planning and all Australians. We are delighted that all parties are united and behind this legislation. The FPA community acknowledges the sensible and timely need to properly consider any unintended consequences, including unnecessary red-tape impacts.

The FPA believes the PJC report re-confirms the strong view that this legislation will not increase regulation or costs to industry, but rather improve trust and confidence in financial planning, delivering stronger consumer protection outcomes and clearing up the current state of consumer confusion.”