The Financial Planning Association of Australia has called for the separation of financial advice from financial product marketing and product information.
It recommended that the government amend the Corporations Act to change the term ‘general advice’ to ‘general information’, as well as recommend the term ‘financial advice’ and ‘financial product advice’ should only apply to personal advice as defined by the Corporations Act.
The FPA’s position on the issue follows an ASIC report that found most consumers were unable to determine the difference between ‘general’ and ‘personal’ advice.
FPA chief executive Dante De Gori said financial advice should only mean financial advice.
“This means it should always require that the advice addresses the needs, objectives and circumstances of the client, and the client’s best interests should always be prioritised over the interests of the advice provider and related entities. Anything else, should not be labelled advice,” Mr De Gori said.
“General advice poses a significant risk to consumers when they do not know how to distinguish if they are receiving a financial advice service, or are receiving financial product information.
“Following the findings of the royal commission, Australians should not have to contend with this uncertainty and we urge the government to implement our recommendations in full.”
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