No one yet prosecuted for calling themselves 'financial adviser'
The legislation protecting the use of the titles “financial adviser” or “financial planner” has been in place for over 12 months but appears to have never resulted in a prosecution mounted by the Australian Securities and Investments Commission (ASIC).
While the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) campaigned hard for legislation limiting the legal use of the titles “financial adviser” or “financial planner” the reality is that in the four years since the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 passed both the House of Representatives and Senate its provisions have not been specifically used.
Instead, ASIC has preferred to use the less specific breach of operating “without a licence”.
The FPA in 2017 celebrated the passage of the legislation noting it as “a major leap forward for consumer protection and the future of the financial planning profession”.
However, when contacted by Money Management, ASIC confirmed it most regularly pursued people on the basis of them either not holding an Australian Financial Services License (AFSL) or being authorised to operate under such a license.
The question of the restricted use of the term “financial adviser/planner” has come to the fore because of the controversy surrounding alleged fraudster, Melissa Caddick, who was passing herself off as a financial adviser without holding an AFSL or an authority.
It also came as veteran Sydney-based financial adviser, Ian MacRitchie, noted that he had been concerned by what he regarded as ASIC’s apparent inaction when sought to help a family friend who had been burned by an unlicensed financial adviser.
MacRitchie said that ASIC had at first advised him that it would not be pursuing the issue and appeared only to change its mind after intervention by the Federal Opposition front-bencher, Andrew Leigh.
He said the Minister for Superannuation, Financial Services and the Digital Economy, Senator Jane Hume, had responded by writing back to him an informing him that such matters were the responsibility of ASIC.
Recommended for you
Results are out for the latest sitting of the ASIC financial advice exam, with the pass rate falling for the second consecutive sitting.
Adviser losses for the end of June have come in 143 per cent higher than the same period last year, and bring the total June loss to over 350.
ASIC’s enforcement action is having an active start to the new financial year, banning a former Queensland financial adviser for 10 years in relation to fees for no service conduct.
ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay.
