A complaint by a reader about our reporting of two Sydney planners facing jail made us do a little research on the subject of who can be called a planner.
Basically there are no rules. Anyone can call themselves a financial planner or financial adviser.
In the recently reported case, two former financial advisers were charged with fraud following an ASIC investigation. The two advisers were said to have acted unlawfully because they lied to sell complex products to clients.
When the cases came to light, the two advisers were banned for life for giving advice. At that time both men held Australian financial services licences (AFSL) but were permanently banned by ASIC from acting as representatives of a securities dealer or investment adviser and from providing any financial services.
They no longer hold AFSLs, but were licensed members of the industry when they provided their fraudulent advice.
However, even if they were not AFSL holders they may still have been termed financial planners or advisers.
And as our irate reader told us, these stories smear the whole industry. That is not our intention. But if it highlights the fact these stories do reflect badly on the industry then perhaps it is time for something to be done about it by the appropriate industry body.
As far as ASIC is concerned, the only people permitted by law to provide personal financial advice are those who work for, or represent, a financial advisory business that holds an AFSL.
Licensed advice covers superannuation, insurance, shares, managed funds and basic banking products.
The issue has been around industry for some time and was discussed at previous ASIC summer schools. Now may be the time for the industry to take up its own cause. FPA, AFA . this one’s for you.
