Following years of agitation by industry bodies and inquiries, the use of the term ‘general advice’ may finally be ending after a finding by the Australian Securities and Investments Commission (ASIC) that the division between personal and general advice confused consumers and placed their financial wellbeing at risk.
Financial Planning Association (FPA) chief executive, Dante De Gori, was cautiously optimistic that the report could be the trigger the Government needed to finally legislate on the issue.
“We welcome the report [by ASIC] because it’s vindicated the FPA’s position on this for the last 10 years for the abolition of the term general advice,” he told Money Management. “Advice should just mean advice, and only qualified planners should be giving it. It’s pretty simple but very significant.”
De Gori said that the term confuses consumers, labelling the differentiation between personal and general advice as a “complete mess”. This was backed up by findings from the Productivity Commission, the Financial Services Inquiry, and now ASIC.
“But the Government is yet to do anything about it, so we’re hoping that this report will be what pushes them over,” the CEO said, saying that appropriate amendments to the Corporations Act to abolish the term needed to be legislated.
While a change of Government could be on the horizon come May, De Gori hoped that the fact that ASIC, as well as the various other bodies to make recommendations on this issue, “isn’t politically motivated” would see changes legislated regardless.
“We would hope whoever wins the election would take this on board,” he said. “Enough things have lined up to say this unequivocally has to change … to move forward as an industry.”