In a widely anticipated move, the government has today tabled a bill that will enshrine the term “financial planner/adviser” into law.
The legislation, introduced by the Minister for Financial Services and Superannuation Bill Shorten aims to enhance protections for Australian consumers by prohibiting anyone who is not a licensed financial planner or adviser from telling consumers they are.
“These reforms will enable consumers to know who to trust with their financial affairs, and build consumer confidence in the financial product advice industry”, Mr Shorten said.
It will also make it easier for the Australian Securities and Investments Commission to take action against “product spruikers”.
Industry bodies the Financial Planning Association (AFP) and the Association of Financial Advisers (AFA) have welcomed the move, with the FPA calling it a “historic day”.
“The FPA has long called for ‘truth in labelling’ for the protection of consumers. The tabling of the legislation from the government responds to those calls,” FPA chief executive Mark Rantall said.
“If passed, this will be a great win for consumers and it strengthens the benefits of the FoFA reforms, in particular the introduction of Best Interest and the removal of conflicted remuneration,” Mr Rantall said.
AFA chief executive Brad Fox said the move could change the perception of financial advice.
“It is an important step in creating consumer understanding of the role and responsibilities of a licensed provider of financial advice and will help consumers identify a trained, qualified provider from any other individual purporting to have this expertise,” he said.
By Alice Uribe (Financial Standard)