The Financial Planning Association (FPA) has sought to ramp up pressure on the Federal Government for the formal removal of the term “general advice”, this time in the context of enhancing digital advice delivery.
While making clear that face to face client relationships would remain pivotal for financial advisers, the FPA has claimed that renaming “general advice” will enhance digital advice delivery.
It said that guidance for consumers would be importance to help them distinguish between “tailored advice”, “guidance” and “general advice”.
The FPA’s messaging is contained in a submission to the Senate Selection Committee on Financial Technology and Regulatory Technology, in which it said that digital advice delivery was usually considered as “general advice” and “any future concern of removing general advice will ultimately inhibit what digital advice can be provided”.
“The government can ensure that the future delivery of digital advice remains available for the FinTech community to develop by supporting [the Australian Securities and Investments Commission] ASIC to rename general advice,” it said.
The FPA submission said ASIC had consumer tested and consulted stakeholders on potential new terms to rename general advice and the FPA would continue providing support in renaming the term.
“A change in terms would also enhance a consumer’s understanding of what information is presented to them from digital services and may prompt consumers to seek more personalised advice after receiving personal advice,” it said.
Elsewhere in its submission, the FPA said there was a strong perception that robo-advice would replace human financial planners but it disagreed with this scenario.
“The FPA believes that financial planners will work hand-in-hand with robo-advice, and the benefits of fintech will ultimately be passed down to consumers,” it said.
Comments
There is a major error in the second line of the third last paragraph....it should read "Seek more personalised advice after receiving general advice". It would also have been interesting to see what alternative terms the FPA put forward in their Senate Committee submission to rename "general advice" ; if they did that at all?
Had an interesting chat yesterday with a former USA adviser. Their initial work was 'guidance' (adviser by the fund manager] and then personal advice was charged for separately. Their view of robo-advice that no serious money would go near it. Just play money or from a few young tech-heads.
I understand the FPA gets cash from AMP and the two are very much intertwined, but I'm just wondering how much of this submission is based on AMP's desire to go digital and get rid of AMP advisers. It seems like the FPA is just again taking instructions by a group that pays them a lot of money.
Overall this is quite disgusting. The FPA is getting money via the professional partner program, a guaranteed source of membership and at the same time AMP is saying Robo advice is the future and good bye AMP planners and this submission is put in. Cha ching FPA, whilst Australians, AMP planners, planners in general are all being shafted.
you are funny Adam. I agree with you. that's why i cancelled my membership of the FPA.
but there are thousands of planners, 14,000 precisely, who are happily paying the fpa to stab them.
14,000 still left and that's because CBA/Westpac/ AMP sends them an excel spread sheet with a list of names and a large cheque paying there membership fees for them. There was a back room deal done between the FPA and CBA during the CBA banking scandal pre FASEA and it was written about in the AFR. You'll recall at the time CBA said it's not us it's those nasty Financial Planners. In return for the FPA remaining silent and calling upon the Government to lift education standards the CBA got a get of Jail card and the FPA got gifted compulsory memberships from the Banks. A choice of either the FPA or AFA. Financial Planners got FASEA in return, ASIC & TPB levies, and significant reputational damage and higher compliance costs as both parties blamed planners. It's a sordid deal and relationship that screams a lot about FPA members themselves. But hey what are they going to say when their employer pays for it all. It's getting in bed with product manufactures as to why over regulation, un-affordable advice and red tape will be a feature of the advice industry for decades. The only way to fight this is to be FPA free.
I am Free! of the FPA, and free of all other shackles.
I am building, I am here, and they will come
https://www.youtube.com/watch?v=o3c_pJ_CLJQ
Pretty sure if someone built a new Association that was all inclusive, puts the needs of Financial Advisers first, and importantly put the needs of Australians first, and product manufactures last, they'd come running. The existing associations either represent a segment such as "boutique advisers group" or just want to represent planners (AIOFP) or like the FPA get kick backs from product manufacturers that taint their representation. There's a gap out there.
Brilliant! I’m going to rebrand and change my office to a Barber Shop so I can give out ‘general advice’ while the client chatters away in the chair about their life and not have to do a thing about it. What morons, changing a name doesn’t erase the Corps act or BID from existence.
So called general advice should be named for what it is. Information. Not guidance. We advisers are either needed or we are not. So much comes out in a face to face meeting that you will never get in a survey monkey type scenario. It is time for the FPA to decide if it believes in the value of advice or not. I don't think the association knows what it is.
It's first priority is looking after AMP. It's literally like AMP picked up the phone and told them what to do, because this is clear win for AMP and everyone else is asking questions.
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