Will enshrinement do the job?

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Industry professionals have questioned whether enshrinement of the terms ‘financial planner/adviser’ will be enough to improve consumer protection.

The SMSF Owners’ Alliance, the SPAA and the ISN have all called for greater measures to improve the sector, on top of legal protection of the terms.

“We strongly believe that improving the skills and competencies of financial advisers is the most important facet of increasing the professionalism of financial advice and giving consumers more protection. Increased competencies of advisers will ensure the best outcomes for consumers of financial advice,” the SMSF Owners’ Alliance said in its submission.

The ISN supported the bill but recommended an increase in the minimum requirements over time – particularly in relation to minimum qualification requirements.

Robert Brown, fellow of the Institute of Chartered Accountants, had strong reservations about the effectiveness of the bill. He said that enshrinement of the terms could create a false sense of consumer protection, and that they should only be used by those who did not receive any form of commissions, percentage-based asset fees or other conflicted remuneration.

The AFA supported the bill in its current form and said it was leading the market towards a narrower solution “rather than leaving them guessing, as thy currently do”. AFA CEO Brad Fox said it would also improve the relationship between accountants and advisers, reminding accountants of where their authorisation starts and stops.

“It would help the accountant have the conversation with a consumer to say, ‘you do need this sort of help, by the look of it. Here is someone who can actually help you’. This is the occupation you need to talk to.”

AFA COO Phil Anderson said it would help prevent the sector’s reputational damage from those holding themselves out to be financial advisers when they were not authorised to do so.

Do you think the measures are enough, or should there be greater requirements?

  • Nobby Kleinman on 22/05/2013 5:54:17 AM

    How much more education needs to forced on and rammed down the throats of advisors to get quality reputation. This is just a crock designed to benefit those who produce the educational standards and then keep raising the bar. The advisers job is to be in front of customers, not more useless education for a title of little worth. The reputation of the adviser is built by the adviser, and not by the industry. The industry has it's own reputation and always will have. The words 'financial planner' alone conjure up in the minds of the consumers the person with whom they are dealing with. Just as they do with any profession. Enshrining the terminology into law as to who can legally use it is as waste of time.
    Go out and build your reputation by name and deed, and don't expect consumers to bow before the title! And I AM on the side of the adviser, not the foolish politicians who are dangling this as a placating carrot while they stab the industry in the back. And organisations blindingly allow it to happen while they fight each other for memberships! Harsh - maybe! But true!

  • alleycat on 20/05/2013 11:11:17 AM

    Enshrinement doesn't guarantee the consumers better protection. Calling yourself an Accountant doesn't guarantee that the consumer is better off. You only need to read the papers of a $5.7m theft by one accountant and look at some others who are not as ethical as their industry bodies promote.
    This is not to be a criticism of accountants or financial planners, because there are good and bad in both but putting them in one category or another and legislating the eyeballs out of the industry/profession isn't the answer either.

  • Peter O'Toole on 20/05/2013 10:55:42 AM

    Assuming the legislation is enacted this will be a good step in the right direction. It would be better still if to use those terms you had to be a member of a professional association.

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