Industry body calls for tighter use of 'adviser' title

An industry body is urging for a revision of how the term ‘adviser’ is used, arguing that those using the term should be subject to the same scrutiny and regulatory requirements as financial advisers.

The Association of Financial Advisers’ (AFA) chief executive, Richard Klipin, has told the Treasury it should limit usage of the term to those who are being regulated by the Australian Securities and Investments Commission (ASIC) and who must adhere to the Corporations Act.

“The problem at the moment is that anyone offering ‘advice’ in a financial space, including accountants, mortgage brokers and real estate agents, can call themselves an ‘adviser’,” Klipin said, adding this creates confusion for the consumer.

“In the interests of better serving the consumer, anyone using the term [adviser] should be subject to the same intense scrutiny and have to adhere to the same strict regulatory requirements as financial advisers,” Klipin said.

“Those who can’t have not earned the right to call themselves advisers.”

Klipin added that an adviser’s role from a legal perspective is to “provide ‘appropriate advice’ based on a client’s circumstances and objectives, in a clear, concise and effective manner”.

Earlier this month, the AFA announced the creation of a government and policy committee designed to communicate its members’ interests to the Government and the regulator.

The committee will consist of AFA members and other industry experts and will work on key issues facing advisers and their clients, including the provision of advice relating to superannuation and insurance, and lobby on government policies in the interest of clients.