Shadow Minister for Financial Services and Superannuation Mathias Cormann has said he plans to refer a Bill proposing the enshrinement of the term "financial planner/adviser" to a parliamentary joint commission enquiry.
The proposal was contained in "a completely unrelated Bill about corporate bonds" tabled to parliament yesterday, Cormann said.
It makes good on a commitment made by Minister for Financial Services and Superannuation Bill Shorten to the Financial Planning Association (FPA) during Future of Financial Advice (FOFA) negotiations a year ago.
That commitment came in exchange for the FPA's softening its stance on controversial opt-in proposals contained in the FOFA legislation.
Senator Cormann said he remains "very sceptical" about the benefits of the proposal.
"The only way [the government] could get their costly and inefficient opt-in proposal through the parliament was as a result of a deal brokered by the Industry Super Network with the Financial Planning Association," he said in a statement to InvestorDaily.
"We remain unconvinced of the need for this additional bit of regulation. Bear in mind that the term "accountant" is not enshrined in legislation, yet accountants are highly respected professionals."
Senator Cormann pointed out that already the only way anyone can provide financial advice is if they have an Australian Financial Services Licence (AFSL) registered through the Australian Securities and Investments Commission.
"Providing financial advice without an appropriate AFSL is fraud now. We can't see how creating an additional offence achieves anything more," Senator Cormann said.
"We will seek to have this legislation referred to the Parliamentary Joint Committee on Corporations and Financial Services so that all of these arguments can be properly fleshed out."
Announcing the measures yesterday, Minister Shorten claimed a victory for the government's financial advice agenda.
"These reforms will enable consumers to know who to trust with their financial affairs, and build consumer confidence in the financial product advice industry," he said in a statement.
The legislation, if passed, will provide consumers with enhanced protections and makes good on the minister's promise to act on the issue of enshrinement, the statement said.
The move was welcomed by the Financial Planning Association (FPA). "The FPA has long called for 'truth in labelling' for the protection of consumers," said FPA chief executive Mark Rantall.
"The tabling of the legislation from the government responds to those calls. We welcome the introduction of the legislation and thank Minister Shorten for honouring his commitment."
Under the proposal, only those fully licensed and authorised to provide personal financial advice will be able to call themselves a financial planner or adviser.
