Call for restricted use of ‘financial planner’
The Financial Planning Assocication (FPA) has called on the Federal Government to enshrine the terms “financial planner” and “financial adviser” in the Financial Services Reform Bill, which would give the terms the same status as “accountant”, “stockbroker” and “insurance broker”.
The FPA made the calls in its submission to the Senate Economic References Committee’s hearing into Mass Marketed Tax Effective Schemes.
FPA senior manager of public policy, Con Hristodoulidis, says under the current version of the FSRB, section 923B makes mention of stockbrokers and life and general insurance agents as restricted terms referring to professionals who can receive a licence for the provision of financial advice. But nowhere is a mention of financial planners and financial advisers.
“We say the terms “financial planners” and “financial advisers” should be locked into the legislation,” Hristodoulidis says.
He says that the restricted use of the descriptions of “financial planner” and “financial adviser” under the FSRB would enhance consumer protection. Under the FPA’s proposal, investors would then be certain that they were dealing with financial advisory professionals rather than promoters of a scheme with little or no experience and qualifications in financial planning.
The FPA also took a swipe at the ATO’s recommendations to the Committee that sanctions be imposed against qualified advisers and financial planners who were linked to mass marketed investment schemes.
“Professional advisers can already have sanctions imposed against them,” he says.
The FPA says the ATO has lacked vigilance in dealing with mass marketed investments and had been harsh and unfair in its treatment of investors involved in such schemes. Hristodoulidis says the ATO should have published its determinations submitted to the Senate Committee much sooner.
Further, he says the ATO’s retrospective judgements had eroded investor confidence. The FPA has reacted by calling for an amnesty for investors who had been issued with reassessments by the ATO prior to 1998, as well as a tightening of the monitoring process of prospectuses and a stepping up of an education campaign aimed at consumers.
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