The enshrinement of the terms “financial planner” and “financial adviser” took another step forward this week, gaining support from the PJC. But submissions from major associations the AFA and FPA, show that there could be some disagreement as to the fine details of enshrinement.
Using the titles of financial planner and adviser will be tied to authorisation under an AFSL. This was welcomed by the AFA, who preferred this move rather than being linked to membership of an industry body.
The FPA however, said that linking the terms to an approved code of professional conduct or an approved professional body, “would accelerate the profession by light years…[And] would have provided maximum consumer protection”.
Rantall argued that linking the use of “financial planner” to membership of a professional body would significantly increase the professionalism of the industry.
Brad Fox, CEO of the AFA said that the ‘best interest duty’ enshrined in the FoFA reforms was a key element in driving professionalism and that this change needed time to work before considering other measures.
There was also disagreement as to whether “financial planner” and “financial adviser” were interchangeable. The AFA and AIST both agreed that both titles were equivalent, and were treated the same under current law.
FPA CEO Mark Rantall pointed out that the FPA had a different perspective, saying, “We believe financial planners are more involved in a holistic approach to financial advice. We think financial advisers are more product advisers.”
The next step for the legislation is for the Government to consider the report and its recommendations and decide whether to proceed with the passage of the Bill unchanged or make amendments.
Do you think there is a difference between the two terms? And should they be associated with a membership? Share your thoughts below.
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