Dante De Gori, General Manager Policy & Standards for the FPA said:

“This is an historic day for all Australians – the FPA called for enshrinement of the term ‘financial planner / adviser’ to allow consumers better clarity in identifying a trusted professional. The passing of the bill is a significant step in strengthening consumer protection and increasing trust in the profession.

“The FPA has led the pathway to professionalism in financial planning and holding our profession accountable to higher standards will benefit those in the profession, those looking to join the profession and the clients they serve. It has been a long journey but we are delighted that our call has been heard and this bill has been passed to the benefit of all Australians.”

Under the Corporations Act 2001, there was no constraint on individuals calling themselves “Financial Planners” irrespective of their training, competence, and even licensing. The legislation now states that only those fully licensed and authorised to provide personal financial advice can now call themselves a financial planner / adviser.

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The AFA welcomes the enshrinement of both of these terms as they have the same meaning and are used interchangeably within the industry.

“This piece of legislation has been reviewed by the Parliamentary Joint Committee on Corporations and Financial Services and they supported it,” said AFA CEO Brad Fox.  “The AFA continues to believe that the legislation is good for both consumers of financial advice services and for the financial advisers who provide those services.”

Mr Fox said the Bill is an important step in creating consumer understanding of the role and responsibilities of a licensed provider of financial advice. “It will help consumers identify a trained, qualified provider from any other individual purporting to have this expertise,” he said.

Mr Fox said the AFA is pleased that the Bill has now passed the House of Representatives and will await the outcome from the Senate.

“July 1, 2013 marks the commencement of the Future of Financial Advice legislation, the MySuper legislation and potentially amendments to the Tax Agent Services Act, all of which will impact financial advisers,” he said.  “The AFA will lead financial advisers and financial planners through what is the most significant period of regulatory change ever confronted by the industry, helping them to meet new challenges and embrace the changes.”

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The PJC was asked to review and provide a report on the benefits of enshrining the terms “financial planner / adviser” for Australian consumers.

The Government will now consider the report and its recommendations and decide whether to proceed with the passage of the Bill unchanged or make amendments. With the Coalition confirming that it will not oppose the Bill in parliament.

Mark Rantall, FPA CEO said: “The FPA applauds the PJC members and the report on enshrinement of “financial planner/adviser” tabled last night. This is a significant step in strengthening consumer protection and allowing consumers with better clarity in identifying a trusted professional. The FPA has led the pathway to professionalism in the financial planning industry and the protection of all Australians and our community believes that this legislation is a significant part of this.

In April 2011, the FPA originally called on the government to restrict the term “Financial Planner” under law for the protection of consumers. The Hon Bill Shorten released legislation for enshrinement in November 2012 and in March this year, government introduced legislation for “financial planner / adviser”.

Under the Corporations Act 2001, there is no constraint on individuals calling themselves “Financial Planners” irrespective of their training, competence, and even licensing. The proposed legislation states that only those fully licensed and authorised to provide personal financial advice can now call themselves a financial planner / adviser.

“The FPA welcomes specific recommendations made by the report to ASIC pertaining to enshrinement of “financial planner / adviser,” Mr Rantall said.

“In order for any piece of legislation to be implemented, an entire profession and industry needs to be behind it. The FPA welcomes the recommendation by the report to have ASIC, through MoneySmart, promote and communicate to consumers the benefits of enshrining the terms financial planner and financial adviser. We also support the recommendation to require ASIC to consult with industry about how to deal with short-term breaches and determine what time is needed to allow inappropriate usage of the term financial planner and adviser to be removed from all marketing material.”

The Coalition originally referred enshrinement to the PJC. It made a recommendation to not oppose the enshrinement provisions of the Bill and confirmed that it would not oppose the passage of the legislation. “This is an historic day for financial planning and all Australians. We are delighted that all parties are united and behind this legislation. The FPA community acknowledges the sensible and timely need to properly consider any unintended consequences, including unnecessary red-tape impacts.

The FPA believes the PJC report re-confirms the strong view that this legislation will not increase regulation or costs to industry, but rather improve trust and confidence in financial planning, delivering stronger consumer protection outcomes and clearing up the current state of consumer confusion.”

The FPA notes that the report acknowledged the widespread industry support for the measure to enshrine the term financial planner.

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