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Protecting true financial advisers a central part of the new regime

Financial advisers are a mightily exclusive group, and should be treasured as such. We all know the new standards that existing financial advisers must meet if they want to stay in the industry (and on the ASIC register), and we know the standards that new entrants must attain to be allowed in. People who are on the register and who stay on it, and those who come onto it, will have worked hard to earn their membership.

It’s sometimes easy to forget that one of the changes that took place in 2019 was a clear restriction on who can use the terms “financial adviser” and “financial planner” to describe themselves or what they do.

Under Section 923C of the Corporations Act (2001) it has been illegal since January 1, 2019, for someone who is not a “relevant provider” or a “provisional relevant provider” (or a “limited-service time-sharing adviser”, but let’s leave the time-share crew out of it for now) to use either term.

“For the best part of a decade missing financial adviser
Melissa Caddick and her husband, unemployed hairdresser
Anthony Koletti, spent more than $600,000 per year funding their
lavish lifestyle using the proceeds of crime, Ms Caddick’s victims allege.”

Sydney Morning Herald, February 9, 2021

A relevant provider is anyone who is a licensee (or a director of a licensee or a related entity) or an authorised representative of a licensee, who is authorised to provide personal advice to retail clients, as the licensee or on behalf of the licensee, in relation to relevant financial products. ASIC is required to list all relevant providers (and people who used to be) on its financial advisers register.

This has been quite a long run-up to say that there’s no record of a financial adviser, current or ceased, called Melissa Caddick on the ASIC financial advisers register. Melissa Caddick doesn’t appear on ASIC’s register of banned and disqualified persons, either. On this basis we can safely say Melissa Caddick is not and never has been a financial adviser – at least, not under that name.

It’s always frustrating to see news reports about individuals who legitimately are financial advisers being pinged for doing the wrong thing; it goes beyond that when people who are alleged to have done the wrong thing are referred to as being financial advisers when they’re not.

Not only is the small percentage of financial advisers who do the wrong thing giving the rest of the industry a bad name, but now the small percentage of people who are not financial advisers and who do the wrong thing is also giving the industry a bad name.

This article was originally published on Professional Planner. To read the article in full, click below.

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2 Comments

  1. chris@cornishwealth.com.au' Chris says:

    This is a good point. If someone was masquerading as a doctor, the media wouldn’t call them a doctor would they?

  2. mpel@tmmpl.com.au' Mark Pel says:

    Hi Simon,
    Great article. My question is, around the term “financial advice” itself. I am looking at a mortgage brokers website at the moment and it says the following:
    “proven personal development programmes for all of our staff so that they can continue to provide the most up-to-date, accurate and comprehensive financial advice available”.
    These people are not on the FAR, they don’t call themselves financial advisers but they state they provide comprehensive financial advice. From a consumer point of view that must be confusing and misleading. Am I lost here or am on making sense.
    Regards

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