Just because financial advisers are providing “strategic advice” or “financial coaching” should not allow them to side-step their regulatory obligations, including to the Privacy Act, according to the Financial Planning Association (FPA).
Responding to a discussion paper around the Commonwealth’s review of the Privacy Act, the FPA said it believed all types of businesses collecting private information in order to provide a professional service should be subject to the Privacy Act framework.
The FPA has pointed out that under some existing regulations including those deriving from the Anti-Money Laundering and Counter-Terrorism Act Financing Act, a business that does not hold an Australian financial services license (AFSL) or does not arrange a financial product will not necessarily be caught the privacy regime.
“There are a range of financial services businesses that may fall outside this definition, including financial planners who provide only strategic advice (which does not involve a financial product recommendation), and financial or money coaches,” it said.
“The FPA considers it is appropriate for all businesses that collect personal information in order to provide a professional service - whether this is financial advice, strategic advice or financial coaching – to be subject to the Privacy Act framework,” the FPA response said.
“Most Australians would expect the disclosure of such personal information to their financial planner or other professional would be covered by privacy safeguards, regardless of whether the service they receive includes the recommendation of a financial product or is authorised by an Australian financial services licence.”
“The recommendation of a financial product should not be the determining factor in whether the Privacy Act framework applies,” the FPA response said.