Associations at loggerheads over enshrinement

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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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  • Peter O'Toole on 20/05/2013 3:55:45 PM

    GM - you are seriously misinformed about the FPA . The Board is majority practicing adviser/planners. The membership is approaching 10000 approximately 80% or more of which are practicing planners. Only practitioner members get to vote. The Code of conduct was not in place during the period the Storm problems arose. In any case Storm where not members of the Principals category that existed at the time.

  • GM on 20/05/2013 11:08:19 AM

    If it is so crucial that only properly qualified practitioners be allowed to use the term "Financial Planner" by what authority does the FPA get to use the term in their name? Surely an organisation run by non advisers (who seem to have a habit of damaging the industry before they move on to their next salaried position) and having a large percentage of non adviser members should not be permitted to pretend by name that they are the representative body of financial planners.
    To those few remaining FPA members who are advisers, ask yourself what is it you get for your fees? The code of conduct that worked so well with Storm? The right to use the CFP designation that your clients don't care about?

  • Stavros on 17/05/2013 4:27:04 PM

    frankly, the respective 'unions' should be working on more important matters than this as there are bigger fish to fry for the members than worrying about enshrining a bloody title.
    the client does not care about this stuff, seriously does anyone prance around worrying about what title they are going to bandy around??
    the client simply wants to trust someone - full stop.
    the unions need to excise those that cannot be trusted,regardless of what they think they need to be 'titled' and the most important part of all is to have the adviser(by the way Mark, this is the correct name if u want it) correctly protected when he/she gets bent over in a 'complaint'.....this is where your energy needs to be directed.

  • Phil on 17/05/2013 12:18:56 PM

    Looks to me as the FPA are looking after their own interest while the AFA have the interest of the advisers (or should i say planners)

  • Another Mad Planner on 17/05/2013 9:59:45 AM

    I think the AFA are on the money here. Under the FPA model, someone can be a CFP and a member of the FPA and only hold a General Advice authorisation and be called a professional planner/adviser.

    There is a group already doing this and working with property spruiking groups setting up free SMSF's with as little as $40,000.00.

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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