Industry welcomes Shorten's consumer protection moves
The two key financial planning industry bodies have welcomed draft regulations, released yesterday by Financial Services Minister Bill Shorten, which will enshrine the terms 'financial planner' and 'financial adviser' in law.
The draft regulations are open for consultation until December 21 and restrict the use of those terms to people who hold, or are representatives of, an Australian Financial Services Licence and are authorised to give personal financial advice.
The Financial Planning Association (FPA), which has long campaigned for the restricted use of the terms, said the change would provide greater certainty and protection to Australian consumers. FPA chief executive Mark Rantall said the advice gap in Australia was partly due to consumers not knowing who to trust.
"There are those in the industry who call themselves financial planners but are seemingly unaware of the specific competency, training, licence, professional standing and services provided," he said.
"This legislation should put a stop to those bad apples who have misled the Australian public and tarnished the profession by wrongly using this title."
However, Rantall also described it as a "first step" and said the FPA would continue to campaign for use of the terms to be restricted to those who are members of a professional body such as the FPA, and/or bound by a professional code of conduct.
Association of Financial Advisers chief executive Richard Klipin also congratulated Shorten on the move to help protect consumers from unlicensed practitioners.
Klipin also acknowledged the consultative approach the Government had taken, describing the currently proposed solution as a "very practical" one that would help improve the perception of the advice profession among consumers.
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