The Financial Planning Association has told Insurance Business it knows of instances where general insurance brokers have fraudulently told customers they can provide financial planning advice when they do not have a licence.
The association is also aware of such fraud in other sectors including real estate.
“You would assume that only those who can use the terms, actually use them but we have been informed of cases where this is not the case,” FPA general manager for policy and conduct, Dante De Gori said. “We find there are issues around advertising and marketing. We get informed about that sort of thing all the time.”
Amendments to the Corporations Bill will make it an offence to use the term ‘financial planner’ and ‘financial adviser’ unless one has a licence to provide advice on certain products. The second reading of the bill was moved last week.
“This bill targets all those who use the term ‘financial planner’ or ‘financial adviser’ to entice the consumer to write place business with them,” De Gori said.
“We are not saying this is a serious problem with GI brokers but that is not to say that there have not been cases where the terms have been used when it should not have been. In some cases we would not have the power to prosecute someone for using the terms. We could only go after them if they were providing unlicensed advice. Now we have this amendment on our side. It is another step in protecting the customer and preventing fraud.”