The Financial Planning Association of Australia (FPA) is once again calling on lawmakers to change the term 'general advice' to diminish client confusion and enhance confidence in the industry.
Instead of 'general advice', the FPA is recommending it be renamed 'product information' or 'strategy information'.
FPA chief executive Dante De Gori believes future reforms to consumer protection should address problems in the law rather than add further regulation.
"While the recent reforms in regulation play an important role in protecting consumers, there has been an unnecessary level of duplicated red tape that will create a significant regulatory burden with no additional benefit to the consumers," he said.
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"There is a high level of confusion in the market, within industry, media, government and consumers about the definitions and roles of financial advisers and financial planners, and those that sell financial products."
Further to replacing the term 'general advice', the FPA said consumers must be given a standard warning about the nature of the advice they are receiving.
Last year ASIC released a report Financial advice: Mind the gap which highlighted how consumers are unfamiliar with the concepts of general and personal advice.
The report echoed the recommendations of the Murray Financial System Inquiry and the Productivity Commission reports which suggested the term 'general advice' is likely to lead to false expectations about the value of advice received.
ASIC noted it would undertake additional research last year to identify a more appropriate term and test the effectiveness of a general advice warning.
De Gori said now is a better time than ever to change the term as the pandemic has demonstrated the value of financial advice.
"In this context, we support ASIC's current project to replace the term 'general advice' with an alternative term so it is clear to consumers what is being offered - advice that does not consider one's specific circumstances," he said.