The Financial Planning Association (FPA) today called upon Assistant Treasurer and Minister for Financial Services and Superannuation Bill Shorten to consider a proposal that would restrict the use of the term ‘Financial Planner’ under law.

“The title of Financial Planner should be restricted under law for use by members of an approved professional association, governed by the highest ethical, educational and professional standards,” FPA chairman Matthew Rowe, told an FPA luncheon attended by Minister Shorten today.

“The FPA believes this to be a fundamental public confidence issue. Consumers deserve the right to differentiate between a qualified, professional financial planner and anyone who happens to hang out a shingle calling themselves a financial planner.”

The FPA received overwhelming support to become a professional association with over 94 per cent of members voting in favour of a new three year strategic plan at an EGM last week.

“The FPA now has a clear and unambiguous mandate to be a professional association for practitioner members only and we have a world leading professional framework for Financial Planners,” Mr Rowe said.

“Similar professions that deal with matters of public interest, such as tax agents and stockbrokers, have the force of legislation behind them and we believe financial planning should be no different.”

Currently, under the Corporations Act 2001, there is no constraint on individuals calling themselves financial planners irrespective of their training, competence, and even licensing. The FPA believes this puts consumers’ at risk of receiving poor advice from incompetent providers and creates consumer confusion as to the difference between financial planners, professional advisers, and others.

“There is a high level of confusion in the market – within industry, media, Government and consumers – about the definitions and roles of financial planners, advisers, and those that sell financial products,” FPA CEO Mark Rantall said.

“Some incorrectly use the term financial planner, seemingly unaware of the specific competency, training, licence, professional standing and services provided.”

The FPA said the purpose of the recommendation was:

• To restrict the ability for individual’s to call themselves a financial planner if they are only selling a product.
• To require financial planners to adhere to professional obligations by requiring planners to be members of an approved professional association.
• The term financial planner is increasingly being used by persons who provide non-traditional ancillary services in marketing and promotional material (attracts customers for realtors, stockbrokers, mortgage brokers etc).
• A definition of financial planner should improve consumer protection by capturing only true financial planners (i.e. excluding those not providing financial planning advice).
• Defining financial planning can either use a functional approach (state methods of practice), a holding out definition (those who hold themselves out to provide financial planning services), or a combination of both.