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Boutique proposes adviser-planner divide

Practice principal Paul Moran of Moran Howlett has argued the term “financial planner” should be applied to higher quality advisers, while “financial adviser” should refer to product agents.

In a submission to the FSI, Mr Moran said that current minimum standards for the advice industry are an “embarrassment” and that consumers need to be made aware of the differences between different types of advice providers and education and training standards.


However, the boutique practice principal also made the case that the terms “financial planner” and “financial adviser” – used interchangeably by many in the industry and other stakeholders – should be identified as appropriate language to mark the levels of quality advice.

“There needs to be a recognition of the differences between those financial planners who act as stewards on behalf of their clients, and those financial advisers who act as conflicted agents serving both their client and a third-party financial product provider – and the public should know how to recognise these different players,” the submission states.

“By creating a meaningful distinction between the terms financial planner (higher standard) and financial adviser (current standard), the public will be able to determine which type of adviser will best suit their needs.”

The submission quotes former financial services minister Bill Shorten, who told an audience of FPA members of the industry’s progression from “life agents to financial advisers to professional financial planners” and discusses “agency theory” as the philosophical foundation of the case for separating the two terms.

Both the FPA and AFA have previously made public comments, to the effect that they do not see a meaningful difference between the two terms, during negotiations for the failed Enshrinement Bill.


However, during a hearing of the Senate Economics Legislation Committee in May, FPA chair Matthew Rowe did draw a distinction between the FPA – which uses the term ‘financial planner’ – as a “professional body” and the AFA – which prefers use of the term ‘financial adviser’ – as an “industry body”.

Is there a meaningful difference between the terms ‘financial planner’ and ‘financial adviser’? Have your say below