Australia-based The Advisers Association (TAA) has called for more crackdown on people who call themselves a ‘financial adviser’ or ‘financial planner’ when they are not.
It has also added that “it is time to address financial product information being called advice when it is not”.
TAA is calling for the term ‘intra-fund advice’ to be renamed ‘intra-fund information’ and robo-advice to be changed to robo-information.
Neil Macdonald, TAA chief executive, said: “In the interests of consumer education and transparency, it is time to call spades, spades. Our preference is to remove the term ‘general advice’.
“As we in the financial advice profession know, true personal financial advice has to consider and meet the client’s best interests obligation and includes an extensive process which involves investigation of the client’s needs, detailed analysis of their circumstances, research into the most suitable products and services to meet those needs, development of a strategy and the production of a statement of advice that outlines solutions to help them meet those needs.
“This extensive process is not followed by those providing general advice, intra-fund advice or robo-advice. It is essential that those financial product services are renamed, so that they are not mistaken by consumers for personal financial advice.”
‘Level the playing field’
Macdonald said renaming the terms would also help “level the playing field” for financial advisers.
“At present advisers are subject to much stricter rules and disclosure requirements than those providing financial product information and the FASEA code makes it hard to provide scoped or scaled advice,” he added. “In cases where financial advisers are simply providing financial product information, then in order to level the playing field, they should receive the same concessions as other financial product information providers.
“This would enable more everyday Australians to get their straightforward questions about a product quickly, simply and easily answered.”
