Previously, under the Corporations Act 2001, there was no constraint on individuals calling themselves “financial planners”, irrespective of their training, competence, and even licensing, according to the Financial Planning Association (FPA).
Financial Services Minister Bill Shorten made a commitment to introduce the measure during last year’s Future of Financial Advice (FOFA) negotiations.
“The FPA has long called for ‘truth in labelling’ for the protection of consumers,” said FPA chief executive Mark Rantall.
“The tabling of the legislation from the government responds to those calls. We welcome the introduction of the legislation and thank Minister Shorten for honouring his commitment.”
The new legislation states that only those fully licensed and authorised to provide personal financial advice can now call themselves a financial planner or adviser.
The FPA said the legislation will now run through the formal parliamentary processes, and added the association will be working with “all sides” to ensure its passage.
“We expect this legislation to put a stop to those bad apples who have misled the Australian public and tarnished the profession by wrongly using this title,” Rantall said.
This legislation, alongside other FOFA reforms, will bring greater consumer protection, he said.
“If passed, this will be a great win for consumers and it strengthens the benefits of the FoFA reforms, in particular the introduction of best interest and the removal of conflicted remuneration. All three of these reforms should not be seen in isolation but as a whole effort by the Australian financial planning sector to turn the corner towards becoming a truly respected profession,” Rantall said.
The FPA, he added, will continue to advocate for membership of a professional body and/or an Australian Securities and Investments Commission-approved code as the ultimate criterion for restricting the term “financial planner/adviser”.
It’s progress. Nothing to get super excited about but one important step out of say 10-15. This step is something most lay people would have assumed was done 30 years ago…
The fpa has done more damage and hardship to this industry than any other body or government could ever hope to do. They created themselves a mafia like existance charging ridiculous fees to their members for courses that help no one but themselves. All the bad apples like storm were all licensed and most were FPA members. The F P A has forgotten who they represent & its time they were pushed out the way & a new regime formed.
Nobby
Not having a shot but
what advice do you offer that the rest of US don’t
and like all jobs / professions etc- you have what it takes or not-if you are now licenced to give advice-nothing changes-if you were never licenced-thats why this is in–bye bye
As an EX financial planner, I give financial advice in the most important and basic areas of which “financial planner/advisers” don’t! And I will continue to call myself an adviser and the advice I give is financial.
This government has thrown out a bone, and the stupid industry heads have lapped it up like useless dogs, and will now hang their hat on this terminology.
It takes far more than a title to prove worth as a financial adviser.
If you hang your hat on this terminology then you probably have little else to offer than product!
Fellow Financial Planners/Financial Advisers… this is a win..let’s take it! I’m getting a T-Shirt printed saying.. “Trust me I’m a Finanical Planner!:
FPA self serving again. Membership of FPA is no proof of professionalism, is it Storm?
Congratulations to the patient souls who have persevered to achieve this result – it sure has been a long haul! Now there are two major challenges to be confronted. Firstly, the standards for being “fully licensed and authorised” need to be defined and, secondly, what can people who have not yet reached those standards call themselves that the public will understand? It is a great result but I am confident that plenty of fringe dwellers will circumvent the restriction with other titles unless the government launches a major information campaign. I wonder??
I’d like to know who the “bad apples” that the FPA are referring to. We have been looking to purchase a book for the last twelve months and all we have found are tired old “Life Insurance” salesman who were grandfathered in with CPA credentials and boast about their belonging to the FPA. These are the ones who have done the most harm, the ones who hide behind the required qualifications but have no idea of current legislation and modern strategies.