Is the end of general advice finally nigh?

FPA/Dante-De-Gori/ASIC/

2 April 2019
| By Hannah Wootton |
image
image image
expand image

Following years of agitation by industry bodies and inquiries, the use of the term ‘general advice’ may finally be ending after a finding by the Australian Securities and Investments Commission (ASIC) that the division between personal and general advice confused consumers and placed their financial wellbeing at risk.

Financial Planning Association (FPA) chief executive, Dante De Gori, was cautiously optimistic that the report could be the trigger the Government needed to finally legislate on the issue.

“We welcome the report [by ASIC] because it’s vindicated the FPA’s position on this for the last 10 years for the abolition of the term general advice,” he told Money Management. “Advice should just mean advice, and only qualified planners should be giving it. It’s pretty simple but very significant.”

De Gori said that the term confuses consumers, labelling the differentiation between personal and general advice as a “complete mess”. This was backed up by findings from the Productivity Commission, the Financial Services Inquiry, and now ASIC.

“But the Government is yet to do anything about it, so we’re hoping that this report will be what pushes them over,” the CEO said, saying that appropriate amendments to the Corporations Act to abolish the term needed to be legislated.

While a change of Government could be on the horizon come May, De Gori hoped that the fact that ASIC, as well as the various other bodies to make recommendations on this issue, “isn’t politically motivated” would see changes legislated regardless.

“We would hope whoever wins the election would take this on board,” he said. “Enough things have lined up to say this unequivocally has to change … to move forward as an industry.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months 1 week ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months 1 week ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 1 week ago

The RBA has handed down its much-anticipated rate decision, following widespread expectations of a close call....

2 days ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

2 weeks 2 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

3 weeks 5 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5