Criminal sanctions on financial planners who fail to give clients a statement of advice or financial services guide within the current timeframes are excessive, unjust and contribute to fear and uncertainty, says the Financial Planning Association (FPA).

In its submission to Federal Treasury’s Review of Sanctions for Breaches of Corporate Law, the FPA says the provisions provide minimal protection for the public yet add substantially to the administrative costs of financial planners.

A planner can go to jail for up to five years for failure to provide a statement of advice within five days of giving advice or failure to give a client an FSG.

FPA CEO Jo-Anne Bloch says it’s essential to have balanced legislative provisions that protect consumers and support the important role financial planners play in providing sound advice.

“A jail sentence of up to five years is clearly an excessive sanction for failing to provide what is in essence a confirmation of advice already given orally.

“A criminal sanction should be reserved for serious or substantial wrongdoing. Civil sanctions would be far more appropriate for non-disclosure of documents.”

Ms Bloch says no other professional group in Australia attracts criminal sanctions for failure to provide clients with written advice, or failure to do so within five days.

“FPA members are spending an undue amount of time on administrative procedures to cover all their bases, and the net effect is increased costs without additional protection for consumers.”