Momentum grows on separating product from advice
The Financial Planning Association (FPA) will on Thursday seek to convince the Senate Committee reviewing the Australian Securities and Investments Commission (ASIC) of the value of a process capable of definitively separating financial advice from product sales.
Having cited the latest Australian Securities and Investments Commission (ASIC) action against Commonwealth Financial Planning and Financial Wisdom as something giving impetus to the FPA's moves, Rantall said he believed it was important that consumers were made fully aware of the differences between product sales and the provision of advice.
He said the FPA would therefore be putting forward a 10-point plan to the Senate Economic Committee to address the situation.
Money Management understands that the essence of the FPA's proposal is that the provision of financial product information should be regulated with consumers receiving a warning in the same terms that apply to the provision of general advice.
This approach would then build on the FPA's initial submission to the Senate Committee within which it said that such warnings "should make it clear that the information is not financial advice, it is information about a financial product or a class of financial products".
Rantall said that he also believed that the legal enshrinement of the term "financial planner/adviser" need to be central to the differentiating between those providing information relating to products and financial planners providing strategic financial advice.
The FPA has already argued within its submission that licensing and all the other forms of regulation which currently apply to general advice should apply to financial product information and that the term ‘financial planner/adviser' "should be defined by legislation, in order to prevent individuals who offer financial product information/factual information from representing themselves as financial planners or financial advisers".
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