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".
Recommended for you
The director of Ascent Investment and Coaching, Michael Dunjey, has been charged with 33 criminal offences.
Adviser Ratings’ latest financial landscape report finds there is a demographic of advice practices achieving an average revenue of $5 million, with only 3 per cent of practices overall seeing a revenue decline.
The FAAA is calling for regulators to take a partnership approach with financial advisers regarding incoming legislation, rather than treating the industry as “guinea pigs”.
There have been strong numbers of returning advisers this year so far, according to Wealth Data, already surpassing the same period for 2024.
