NIA opposes legislating 'financial planner'

The National Institute of Accountants (NIA) has opposed moves from financial planning bodies to have the use of the terms ‘financial planner’ and ‘financial adviser’ restricted by law.

Last week the Financial Planning Association (FPA) proposed that only those belonging to a professional body would be able to call themselves ‘financial planners’ while the Association of Financial Advisers (AFA) said ‘financial planner/adviser’ should be restricted to those who operate under an Australian Financial Services Licence (AFSL).

These moves are an attempt by the financial services sector to exclude other professionals from providing advice services relating to financial services, the NIA stated.

Attempts to restrict the term are nothing more than a cover to exclude other equally qualified advisers such as accountants and lawyers, said NIA chief executive Andrew Conway (pictured).

Financial planning is not restricted to one form of advice, and covers areas such as tax, products, non-product advice, government benefits or retirement planning, which could be provided by accountants or lawyers, the NIA stated.

“For many years the financial planning industry has tried to stake out a segment of the financial advice sector. Enshrining the term financial planner in legislation will not improve the standards of advice to everyday Australians, nor will it bring back the millions of dollars lost to Storm or Westpoint,” Conway said. 

Representatives from both the FPA and AFA say that the NIA may have misinterpreted the intentions of last week’s announcements, saying that there had been no attempt to exclude other professions such as accountants and lawyers.

The FPA’s general manager of policy and government relations, Dante De Gori, said it seemed as though the NIA had misunderstood the FPA’s intentions in making the announcement.

The FPA is not saying the use of the term should be restricted to any one professional body, just that the use of the term ‘financial planner’ is only open to members of a Government-approved industry body, which could also include accountants belonging to bodies such as the NIA.

The regulators should decide which bodies qualify, and the FPA was not trying to turn this into a FPA-specific issue, he said.

The FPA had a strong belief that this would improve the financial planning industry and consumer confidence in planners, he said.

AFA national president Brad Fox said that the AFA’s view remained that a person should operate under an AFSL to provide financial advice.

“We’re simply seeking that holders of AFSLs that can provide financial advice are not only differentiated in the marketplace but also reinforced under law,” he said.

This was to protect consumers, and to ensure that they knew the people who were providing them with financial advice were people they could rely on, he said.

This could well include people of multi disciplines, including accountants, who had the authority to operate under an AFSL, he said.