‘General Advice’ to disappear under FPA plan

The Financial Planning Association (FPA) has filed its 10-point plan with the Senate Economics Committee outlining its proposals to separate product sales from advice, and suggesting that the term "commission" be defined and banned under the General Advice exemption and that "General Advice" be re-termed "general or product information".

Also sitting at the core of the FPA's 10-point plan is tax deductibility of advice and the legislative enshrinement of the term "financial planner/adviser".

The 10 point plan also points to the desirability of ASIC dealing planner breaches of the best interest duty and planners then having the right to appeal to the Administrative Appeals Tribunal (AAT).

The proposals also point to the need for planners/advisers to "have membership of an Australian Securities and Investments Commission (ASIC) approved professional body; and hold minimum education standards of a relevant university degree, and three years experience over a 5 year period.

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The FPA proposal also calls for legislative amendments to "develop criteria so that ASIC can approve professional bodies such as those prescribed in the Tax Agent Services Act or the approach proposed by the FSA in the UK.

The FPA is also proposing the establishment of a public register to be managed by ASIC, with a requirement for all financial planners/advisers (including employed representatives) who provide personal advice to be individually registered and for ASIC "to have suspension powers for financial planners/advisers suspected of material and systemic breaches of the best interest duty".

However it notes that "ASIC must have a justifiable position and the financial planner/adviser has the right of appeal to Administrative Appeals Tribunal (AAT).