Legislation enshrining the term “financial planner” in law, restricting use of the term to those who are fully licensed and authorised to provide personal financial advice, has been tabled and moved in parliament.
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”.
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