Risk and insurance advice should be licensed under a separate regime to financial planning, Synchron director Don Trapnell has proposed, in a bid to formally split the two disciplines.
In a statement issued yesterday, Mr Trapnell said under the current legislation both financial advisers and risk advisers are treated as the same profession, but that they should be treated as separate disciplines.
“If you are giving financial planning advice, you are talking facts and figures – how to take a client’s wealth from where it is today and project it forward. That’s an analytical conversation,” Mr Trapnell said.
“If you are giving risk advice, you are talking about protecting a client’s current and future lifestyle and that of their family. That is an emotional conversation.”
“For some reason, risk products continue to be linked together as financial planning products rather than insurance products. I do genuinely believe there is a strong case for separating the two,” he said.
Mr Trapnell said the solution in separating the two professions lies in both holding a specialist AFSL to deal in either financial advice and or risk insurance.
“One licensee could hold both licences and their authorised representatives could be authorised in both areas, or they could be authorised to provide either risk or investment advice,” he said.
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