The Financial Planning Association (FPA) wants the Government and regulators to encourage advisers to join professional associations, to combat white-collar crime.

In a submission to the Senate Economics References Committee inquiry into penalties for such crimes, the FPA says association members must meet professional standards.

“Professional, ethical and education standards… [help] financial advisers identify appropriate financial strategies suitable to each client’s circumstances, goals and needs,” it says.

“This is a fundamental form of consumer protection and must be at the core of providing personal financial advice to clients.”

The FPA has analysed Australian Securities and Investments Commission (ASIC) enforcement actions on financial advice since July 2009.

It says association members account for less than 5% of actions.

“FPA members have also accounted for a significantly smaller proportion of financial advisers banned by ASIC,” the submission says.

“The fact 89% of financial advisers banned by ASIC were… not members of the FPA, and therefore not subject to the additional regulatory oversight of our professional obligations, clearly demonstrates the consumer protection benefits of professional standards.”

The FPA says if more advisers are encouraged to join professional associations, consumer protection will improve.

“This, in turn, helps increase consumer confidence and trust in the relevant profession and drives consumer recognition of the value of obtaining professional advice and services.

“Encouraging membership of a professional body is a sound business investment and sound government policy.”

The FPA has called on the Government to educate consumers to seek advisers who are members of professional associations.

“The Government is in a position to significantly enhance and educate consumers on the importance of financial advice and the critical role a national advice profession plays in the financial security of all Australians,” the submission says.

“By changing the language and messaging around financial advice to the community, the Government can better advocate the benefit of a professionally developed financial plan.”

The FPA wants the terms “financial adviser” and “planner” enshrined in legislation.

It has also called on ASIC to co-operate with the advice industry and share information about misconduct and “bad apples”.