Restricted ‘planner’ term proposal to weed out shonks
A RESTRICTED definition of the terms ‘financial planner’ and ‘financial adviser’ would protect consumers from shonky operators pretending to be financial planners, according to theFinancial Planning Association (FPA).
The restriction of the terms has been proposed by Federal Treasury in the Corporation Amendment Regulations 2003 and would be enforced by theAustralian Securities and Investments Commission(ASIC) under the Financial Services Reform Act (FSRA).
The FPA says the move will give consumers greater certainty that those who call themselves financial planners are covered by strict legal requirements.
FPA chief executive Ken Breakspear says a publicly recognisable standard has been long overdue.
"It has been an ongoing concern of the FPA's that without the restriction of the term, there has been potential for consumers to be misled and suffer detriment as a consequence of being advised by people holding themselves out to be financial planners, but who do not hold the appropriate professional qualifications,” Breakspear says.
The FPA has lobbied for the restriction of the term ‘financial planner’ for more than 18 months.
"Whilst it is up to the industry to educate consumers about the need to obtain financial advice from someone who is licensed, it is equally important that the FSRA regime support the interests of the consumer by ensuring that they can rely on the term ‘financial planner’,” Breakspear says.
The changes would mean people such as real estate marketeers will no longer be able to represent themselves as financial planners to the public.
The FPA says many consumers have lost savings due to such agents purporting to offer comprehensive investment advice for retirement.
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