FPA angered by ruling on advice

TheFinancial Planning Association(FPA) has slammed a recommendation by the Federal Joint Parliamentary Committee on Corporations and Financial Services that may allow accountants to legally provide a level of advice on superannuation without having an Australian Financial Services Licence (AFSL).

The attack came as theInstitute of Chartered Accountants in Australia(ICAA) welcomed the recommendation and called on the Commonwealth Government to implement it immediately.

The committee’s opinion was that accountants should be able to provide non-specific advice on superannuation fund structures without an AFSL.

ICAA chief executive Stephen Harrison says the institute has been advocating that a planning licence is not needed for this type of advice, particularly where there is no financial product component.

"The release of this report confirms that licences are not necessary if an accountant is not providing specific advice about a financial planning product,” Harrison says.

However, FPA chief executive Ken Breakspear says if the recommendation was accepted, it would open up a huge discrepancy in the licensing process and significantly devalue the whole Financial Services Reform Act (FSRA).

Breakspear says that consumer protection was a high priority for the FPA and it would campaign to ensure the recommendation did not become law.

"The FPA doesn't believe that accountants or any other professional grouping should be exempt from the law when it comes to providing financial advice,” he says.

Harrison says that the ICAA believes AFSL licences are necessary where specific financial investment product advice is provided.

“But we strongly believe a distinction needs to be made to avoid confusion for our members and in turn the consumer,” Harrison says.