On Tuesday night, the federal House of Representatives voted in favour of the Corporations Amendment (Simple Corporate Bonds and Other Measures) Bill 2013: Amendments, acting on the recommendation of the Parliamentary Joint Committee on Corporations and Financial Services that the piece of legislation be passed.
In a statement, financial services and superannuation minister Bill Shorten said the financial planning-relevant sections of the Bill would further the government's Future of Financial Advice (FOFA) agenda.
“The amendments enshrining the terms ‘financial adviser’ and ‘financial planner’ and similar terms will enhance consumer protection by making it easier for Australian consumers to identify genuine providers of financial product advice,” Minister Shorten said.
“The amendments will make it an offence for a person to hold themselves out to be an authorised financial adviser or financial planner when they are not, or to use terms of similar importance, thereby helping to protect consumers against property spruikers and other unlicensed operators.
“The financial advice industry has welcomed these amendments as a historic reform that will benefit both consumers and industry, and will strengthen the benefits of the government’s Future of Financial Advice reform package.”
However, shadow financial services minister Mathias Cormann had previously voiced the Coalition’s view that the enshrinement of the terms was “unnecessary” and amounted to red tape.
“The government has attached its proposal to enshrine the term ‘financial planner’ and ‘financial adviser’ to a completely unrelated Bill about corporate bonds, which was introduced into parliament,” Mr Cormann told InvestorDaily in March.
“We remain unconvinced of the need for this additional bit of regulation.
“Those who are pushing for this change see it as a first step on a pathway towards further regulation and additional costly red tape down the track.”
Industry bodies warmly welcomed the move.
“This piece of legislation has been reviewed by the Parliamentary Joint Committee on Corporations and Financial Services and they supported it,” said Association of Financial Advisers (AFA) chief executive Brad Fox in a statement.
“The AFA continues to believe that the legislation is good for both consumers of financial advice services and for the financial advisers who provide those services.”
Financial Planning Association general manager for policy and conduct Dante De Gori told InvestorDaily's sister publication ifa that “consumers need to have clarity and understanding and this outcome will help support that and the standing of the profession”.
