Future of Financial Advice

Exposure Draft - Legislative amendments relating to the use of the expressions 'financial planner' and 'financial adviser'

The Hon Bill Shorten MP has released an exposure draft of legislative amendments to restrict the use of the terms 'financial adviser' and 'financial planner'.

In March 2012, during parliamentary debate on the Future of Financial Advice (FOFA) reforms, the Hon Bill Shorten MP, announced that the Government would introduce legislation into parliament by 1 July 2013 to define the terms 'financial planner' and 'financial adviser' in law.

A number of terms are defined and restricted in the Corporations Act. For example, use of the terms 'independent', 'impartial' and 'unbiased' is restricted, as is use of terminology such as 'stockbroker', 'futures broker' and 'insurance broker'. Restricting terms in this way is intended to signal to consumers certain information about the person using them – for example, that the person does not accept commissions or is authorised to act as a stockbroker. The addition of 'financial adviser' and 'financial planner' to these terms is intended to improve outcomes for consumers of financial advice services, by empowering consumers of financial services to identify genuine providers of financial product advice.

An exposure draft of legislation to define these terms and a draft explanatory memorandum are provided below for comment.

Consultation Documents

  PDF RTF/DOC
Corporations and Consumer Legislation Amendment (Consumer Financial Protection) Bill 2012 124KB 44KB
Explanatory Memorandum 233KB 260KB

Submissions

Submissions for this consultation closed on 21 December 2012.

Sixteen submissions have been received in response to this consultation. Fourteen of these are public submissions and two are confidential. The public submissions are listed below.

  PDF RTF
Association of Financial Advisers 137KB N/A
Australian Financial Markets Association 115KB N/A
Australian Institute of Superannuation Trustees 352KB N/A
Conomos, Arthur 19KB 33KB
CPA Australia and Institute of Chartered Accountants Australia 352KB N/A
Deloitte 1.2MB N/A
Financial Planning Association of Australia 257KB N/A
Financial Services Council 664KB N/A
Harris, Bruce 14KB 32KB
Hickman, David 38KB 32KB
Industry Super Network 277KB N/A
Parkin, Greg 19KB 42KB
Ridd, Ian 67KB 47KB
Suncorp 72KB N/A

The opinions expressed in the submissions are those of the authors and do not necessarily reflect the views of the Government or The Treasury.