Some consumers are currently getting information from advisers that cannot be considered “advice” and this justifies backing the Productivity Commission’s (PC’s) recommendation to rename “general advice”, according to the SMSF Association.
SMSF Association acting chief executive, Jordan George said he believed that the PC recommendation, if accepted, would give consumers a clearer understanding of the type of advice they were receiving, and particularly whether it considered their personal circumstances and financial goals or whether it was simply factual or sales information.
“The Association has long argued that the term ‘general advice’ is misleading, and that there is a pressing need for an alternative definition to ensure consumers better understand what type of advice they are receiving,” he said. “Consumers are now getting information from some advisers that cannot be considered ‘advice’ in the sense it does not consider the totality of their financial situation.”
George said that what needed to be achieved was a situation where ‘advice’ was clearly differentiated from factual or product information.
“As the Association has argued since 2014, ensuring that there is transparency between what is ‘advice’ and ‘information’ is essential to give consumers greater clarity around the status of the advice.”
George said the Association also supports the recommendation that provides greater transparency about products on the approved product lists of Australian financial service licensees.
However, he signalled the Association’s concern about the PC’s recommendation that financial advisers would not require a separate Australian credit licence, noting that “one-stop property shops” were of grave concern in the SMSF environment, and as such any recommendation that made it easier to offer “unscrupulous property advice” had to be carefully considered.