Consumers and AFA members to benefit from adviser registration

The establishment of a central register of financial advisers, which was included in the Future of Financial Advice (FoFA) amendments deal announced last week by the Coalition, with the support of Palmer United Party (PUP), will benefit both consumers and Association of Financial Advisers (AFA) members.

AFA CEO, Brad Fox, said the creation of a detailed register is an excellent step forward in helping Australian consumers identify and engage with AFA members and other professional financial advisers.

“Research into consumer understanding of financial advice identifies a number of barriers to seeking financial advice. One of those barriers is identifying who a professional adviser is and who is not, which includes identifying whether an individual has the legal authority to provide personal financial advice,” Mr Fox said. “A central register will simplify the selection process for consumers and help ensure they are getting advice from a professional adviser.”

Mr Fox said consumers should be able to use this register to understand that they are seeing, or going to see, an adviser that can provide the expertise they need.

“We have seen examples where unqualified people have held themselves out to be a financial adviser,” he said “Only people with appropriate qualifications, experience and legal authority will be on the register. This will increase the protection available to consumers.”

While the exact details of the content that will be included on the register are not yet finalised, the AFA expects that it will include professional association memberships and any professional designations held by an individual adviser.

“We believe that a member of the public looking at this register will want to see the qualifications held by the adviser including any designations they may have such as the AFA’s Fellow Chartered Financial Practioner (FChFP) or Chartered Life Practioner (ChLP), as well as their AFA membership, meaning they are therefore accountable to the AFA Code of Ethics,” Mr Fox said. “In this way the consumer gains added assurance their adviser is acting professionally, and advisers will see further benefit from joining the AFA. Professional association membership is an obvious and important point of difference.”

Mr Fox said that the rebuilding of consumer trust in financial advice will need to overcome several hurdles, but the adviser register is a step in the right direction. “Transparency builds trust, and the register, along with the other requirements suggested by PUP that explicitly require an adviser to ensure the client is aware of their rights, and the adviser’s responsibility under the Best Interests Duty, shows FoFA has moved in the right direction.”