AFA calls to enshrine the term 'financial adviser'

The Association of Financial Advisers (AFA) has reiterated its calls for the Federal Government to enshrine the term ‘financial adviser/planner’ in legislation, but in slightly different terms than the Financial Planning Association (FPA).

The AFA chief, Richard Klipin (pictured), said the association had initially called for the move in its 2009 Ripoll Inquiry submission, and was again seeking for the term to be restricted to those who operate under the Australian Financial Services Licence (AFSL).

Earlier this week, the FPA asked Treasury to restrict the use of the term ‘financial planner’ to those who belong to an “approved professional association”.

However, Klipin said clients would be better protected if only those who worked under an AFSL could call themselves financial advisers/planners.

“Anyone could set up a business called ‘x financial advising’ and not be a part of an AFSL and advise on real estate or international products. No one would know until it all went bad (if it went bad), and no one can stop them from calling themselves financial advisers,” Klipin said.

Klipin said that the AFA believes that it would be better for the image of the industry as well as for the consumer interest if the law prohibited the use of the term ‘financial adviser/planner’ for reference to unlicensed practitioners.

 “If you just check out the ASIC website – when they talk about banning advisers or planners, they’ll just say ‘ASIC has banned an unlicensed financial adviser.”

“Until you legislate or regulate the term financial adviser/financial planner and put certain criteria around the use of that term, then people in the Australian community are certainly in danger of getting burnt,” he said.