The Financial Planning Association (FPA) shares the National Insurance Brokers Assocation’s opposition to the Federal Government’s proposed FSRA refinements dealing with sales recommendations.

Although it endorses the intent, the FPA believes much more work is necessary to avoid serious unintended consequences.

CEO Jo-Anne Bloch says a new sales recommendation category has the potential to confuse consumers and increase the compliance burden once again for financial planners.

She says the FPA supports the Government’s intention to give consumers clarity about the capacity in which a financial adviser is acting – as a professional adviser working in a client’s interests or as a salesperson not required to consider the client’s needs.

“However, we have real concerns that the proposal to create a ‘sales’ category in its present form could substantially alter the structure of the regulatory regime and weaken consumer protection under FSR.”

Ms Bloch is not confident consumers could differentiate between a sales recommendation and advice, then understand they are almost wholly responsible for choosing a product.

“We think this takes us back to the 1970s days of selling life insurance products,” she said. “We believe the definition of personal advice is too broad and gives rise to practical problems.”