KEY POINTS:
Eleventh hour changes to proposed new laws governing financial advisers have irritated the financial planning industry.
The definition of who is considered a financial adviser has been narrowed, and now may or may not include those advising on investment property.
It is also proposed that the Securities Commission
alone be responsible for enforcing the new regulation.
Until this week, the plan was to run a co-regulatory model whereby the commission would work in conjunction with approved professional bodies.
At the moment those who offer financial advice are largely unregulated. There are no minimum qualifications and membership of professional bodies is not mandatory.
The planned new regulations are part of a suite of measures to come out of the Government's Review of Financial Products and Providers, undertaken two years ago.
Submissions on the Financial Advisers Bill closed on April 4, but Parliament's finance and expenditure select committee is asking interested parties to make fresh submissions on the changes within four weeks.
Chief executive of the Institute of Financial Planners, David Hutton, said he was worried that the new-look bill may not cover everyone giving advice or the full range of products.
"Should investment property be included? We say yes," Hutton said.
He said there was also concern over a proposal to allow institutions such as banks to become accredited as a single entity, rather than accrediting all their advisers individually.
Hutton said it wasn't clear whether that meant there would be a register of all authorised people within the institution.
"This is why I'm saying the devil's in the detail."
Murray Weatherston, chairman of the Society of Independent Financial Advisers, questioned the motivation for the changes.
"I reckon the Government's been gotten to by some large institutions that don't want to be caught up in the legislation."
Weatherston also asked why the discussion had always centred around co-regulation, but now suddenly the prospect of a single regulator was back in play.
Select committee chairman Charles Chauvel conceded the last minute changes were "clumsy", but said they were made after feedback from the industry.
He said there had been debate about whether it was desirable to have a range of industry organisations involved in regulation, and having a single regulator was also more compatible with Australian law.
Chauvel said there was also concern about making the definition of financial adviser too wide - "for example a travel agent that happened to be offering some travel insurance as part of a package might be caught".
AMENDED BILL
* The Financial Advisers Bill will require those offering financial advice to have minimum qualifications.
* Originally professional bodies were going to regulate the industry along with the Securities Commission, but now lawmakers want a single regulator.
* Institutional advisers (such as bank advisers) may not have to be individually accredited, and investment property advisers may or may not be covered.