The terms ‘financial planner' and ‘financial adviser' may be synonymous as far as the Government and the media are concerned, but within the industry there is a debate about definitions.
Financial Planning Association (FPA) general manager for policy and standards, Dante De Gori, says there is "absolutely a difference in definition between financial planning and financial advising".
"Financial planning is looking at financial goals and needs from A to Z, while financial advising is recommending or giving some advice on a financial product," said De Gori.
De Gori acknowledged that the FPA's involvement with the international Certified Financial Planner program meant his organisation tends to use the terms ‘financial planner' and ‘financial planning'.
Financial advising is simply part of the more holistic discipline of financial planning, he said.
De Gori acknowledged that the FPA definition of the terms wasn't necessarily "the dictionary definition".
"We've got our own membership debating about whether they're advisers or planners, and whether there's anything different. Obviously the media, the Government, politicians – and, of course, the most crucial people, consumers — don't yet know the difference," De Gori said.
De Gori was quick to point out that the FPA was not seeking to discredit the notion of ‘financial advice', as his organisation defines it.
"Financial advice is part of the six-step financial planning process – the advice/product/recommendation piece," he said. But as far as Association of Financial Advisers (AFA) chief executive Brad Fox is concerned, the assertion that there is a difference between the two terms is "completely incorrect".
"There is no difference in behaviour in both the research, preparation and delivery of advice between people who term themselves financial advisers or financial planners. They're completely interchangeable terms," he said.
Some AFA members refer to themselves as financial planners because it has "a better ring to it", while there are others who choose to call themselves financial advisers, Fox said.
"With the enshrining of the term as an interchangeable term, there is no benefit to consumers or to the marketplace to divide it on the basis of semantics," he said.
Fox also took the opportunity to reject the notion that the majority of AFA members are ‘life risk advisers' or ‘riskies'.
"If you [take me for example], around about 25 per cent of my revenue came from risk as part of providing full financial advice. And I'd be pretty much around the norm for an AFA member," he said.
Just because someone delivered risk advice, it did not mean they should be held in lower regard than someone else, Fox said.
