Lawyers and accountants will not be subject to the same licensing requirements as financial planners if the findings of the Joint Statutory Committee on Corporations and Securities are accepted.
Lawyers and accountants will not be subject to the same licensing requirements as financial planners if the findings of the Joint Statutory Committee on Corporations and Securities are accepted.
The same recommendations will also exclude life advisers from having to disclose commissions on risk products.
In a parliamentary report on the Financial Services Reform Bill handed down earlier this week, the Committee recommends the expansion of the ‘declared professional bodies’ exemption, which means lawyers and accountants will not be subject to the financial planning licensing regime.
The Committee has also accepted the life industry’s argument that commission disclosure puts risk advisers at a competitive disadvantage. Consequently, life advisers will not be required to disclose commissions on risk products.
However the FPA has opposed this stance with Public Policy Manager, Con Hristodoulidis arguing that anyone who offers financial services advice should be subject to the same rules and regulations as the rest of the profession.
“The Committee’s argument that the investment advice given by accountants and lawyers is ‘incidental’ is a fallacy,” he says.
“Such advice is not considered ‘incidental’ by consumers who use it as a basis for significant financial decisions. Feedback from our members indicates that a significant number of consumers have lost money because of so-called ‘incidental’ advice.”
Hristodoulidis further argues that consumer protection will be undermined if life advisers are exempted from disclosure obligations.
“The Committee’s acceptance of the argument that such disclosure requirements would act as a competitive disadvantage for life agents is an insult to consumers,” he says. “Consumers have a right to know where undisclosed incentives are biasing the advice.”
