Corporations Amendment Bill will stamp out financial planning fraud in GI broking

Corporations Amendment Bill will stamp out financial planning fraud in GI broking

Corporations Amendment Bill will stamp out financial planning fraud in GI broking

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.”

 

5 Comments
  • Charles 28/03/2013 11:29:31 AM
    There appears to be a planned attack on "general Insurance Brokers " by the "life " side of the Industry, probably in an endeavour to divert attention from their industry which has been renowned for poor consumer acceptance.
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  • Robert Cooper 28/03/2013 11:56:58 AM
    I cannot imagine what advantage there would be for any General Insurance Broker to call themselves a Financial Planner unless of course they have a licence in that area. To me being an "Insurance Broker" is just as prestigious term as Financial Planner. Where is the advantage?
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  • Ian J 28/03/2013 12:42:01 PM
    Forget the prestige Rob, I'd say the IB sector has a better reputation than FP's and on the whole we are mostly considered to be of greater benefit to the community at large. Many (not all, or most, but many) FP advisers are only ex life insurance sales people who used to sell trumped up 'savings plans', 'childrens education plans' etc under the guise of regular premium investment plans with huge contractual terms. Why would a GI Broker want to be tarred with that brush?
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