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”.

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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.




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I thought I'd give the Adviser Register and also ASIC's banned and disqualified register a go to find this missing Sydney non-adviser who's still being called a Financial Adviser just this morning on the ABC. Guess what? Nothing on both registers. Unless I'm using these tools wrong or this person changed their name, shouldn't they be showing up somewhere if they are being referred to as an adviser or ex-adviser. If I never went to law school and am providing legal advice, I wouldn't be referred to as a lawyer or ex-lawyer. This is an epic fail on all fronts. In our world you only get in trouble for doing the right thing.

Hardly surprising! They are too busy spending tax payers (and adviser's money from the levy) to renovate their offices, give themselves pay rises and pay third parties for submissions that are highly conflicted.

It beggars belief that their corrupt and conflicted behaviour continues without action from the Government.

There is no such thing as an "unlicensed financial adviser".

Someone who gives financial advice without a licence could potentially be called a fraudster, imposter, conartist, or crook. But never an "unlicensed financial adviser".

It appears that we, as authorised financial advisers, are only treated with contempt by both ASIC and the any government of the day. I knew that nothing would become of legislating the use of the name of financial adviser or planner as certain journalists will report what they believe because of their own ignorance or laziness to print the facts. Cardinal George Pell is a classic example.

Unfortunately we are a "soft touch" and an easy target. However, it is better not be too concerned about mediocrity in the media and just keep on doing what one is best at doing.

The ban on use of the term 'stockbroker' by non-market participants was in 20 years before the FPA got 'financial adviser/planner' protected, and noone was ever prosecuted for that either ...

MIA Jane - No media release since early Dec. No speech. No announcements this year. Just a letter to go to ASIC. Can I get paid to do this type of thing??

Here is an interesting fun fact. The very first person reported for a s923C contravention was ASIC's own MoneySmart Ambassador! It took 9 months of ASIC actively trying to avoid actioning the misconduct report before they finally took action. They only took action in the end when the case officers knew I was about to lodge a complaint against them with their Professional Standards Unit. In the end all they did was write to their MoneySmart Ambassador and request the references to her being a "qualified financial planner" to be removed from all media articles and online content. No actual penalties. The next person to avoid receiving any penalties was a (now retired) business reporter with the ABC. He said the false reference in his bio to being a 'qualified financial planner' was an accidental oversight. A number of unlicensed 'money bloggers' have also been reported and again no action taken (other than ASIC requesting they take up a general advice license). It is amusing to see one blogger claim that the 'no penalties by ASIC' was proof he did nothing wrong and that he voluntarily took out a general advice license out of caution (not true, this was required by ASIC). There is much that happens behind the scenes that doesn't make the media. There is also much that ASIC will never admit to unless they are backed into a corner. The enshrinement of the term is a moot point anyway, it is only effective where it is used in conjunction with a 'financial service'. The lowest threshold for a 'financial service' is general advice in respect of a "class" of financial product (i.e. insurance as a whole, or super as a whole). The individuals noted above were found making qualitative statements about a class of financial product while using claiming to being a licensed adviser.

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