The Government has tabled legislation in Parliament that will define in law the terms 'financial planner' and 'financial adviser'.
In tabling the bill, the Minister for Financial Services, Bill Shorten, said the amendments would make it "an offence for anyone to call themselves a financial planner or financial adviser, unless they are appropriately authorised under the Australian financial services licensing regime".
"These amendments deliver on my earlier commitment. Schedule 2 of the Bill will commence on 1 July 2013 (or after Royal Assent, if that occurs later), concurrently with the FOFA [Future of Financial Advice] reforms," said Shorten.
"People acting in breach of these requirements face penalties of up to 10 penalty units for individuals for every day the contravention occurs, and 50 penalty units per day for corporations," said Shorten.
The tabling of the legislation was welcomed by the Financial Planning Association (FPA), which has championed the move to legislate the terms.
"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," said FPA chief executive Mark Rantall.
"All three of these reforms should not be seen in isolation but as a whole effort by the Australian financial planning sector to turn the corner towards becoming a truly respected profession," he said.
Update: Association of Financial Advisers chief executive Brad Fox also welcomed the release of the legislation.
“This Bill is about the understanding and perception of financial advice,” he said.
“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,” said Fox.
Consumers deserve to have clarity with respect to who they are seeking advice from, he added.
