LABELLING of financial planners could be split between "sales people" and "advisers" under options being considered by a parliamentary inquiry into the fallout from Storm Financial's collapse.
The committee is considering the future shape of the financial planning industry amid a groundswell of criticism about its role in investor losses from the collapses of Storm Financial, Timbercorp and Great Southern.
Bernie Ripoll, the chairman of the Corporations and Financial Services Committee, said evidence suggested people seeking financial advice sometimes were faced with sales people rather than advisers.
"I think we're starting to see a really clear distinction between the two," Mr Ripoll said yesterday.
"Some don't really sell any advice [about products] at all, they just sell them. There are others who provide advice in the real sense of the word."
The committee faces a tangle of issues, including debate about the influence of commissions and how qualified financial planners need to be. The committee has been told planners do not require a university education, whether they advise on an investment of $10,000 or $100 million.
Mr Ripoll said the issue of qualifications raised the trade-off between quality and access. "It's really a balance between consumer protection and completely open access," he said.
The industry also faces challenges to its own financial health after the Investments and Financial Services Association, which represents big retail fund managers, and the peak industry body, the Financial Planners Association, declared a phasing-out of commission payments.
Some have interpreted MLC's decision not to buy Aviva's 22 per cent stake in Australia's largest financial planner, Professional Investment Services - during MLC's purchase of Aviva's insurance businesses - as a vote of no confidence in PIS's commission-based model.
Phil Gillard, a financial adviser with Shadforth Financial Group, echoes Mr Ripoll's views about a divided industry.
"To me the whole debate comes down to two things: the advice deliverer and the product salesman," he wrote in a post on the Herald website.
"Every concern raised in the feedback relates to people having experience with salesman - not true advisers."
Mr Gillard said the better financial planners were starting to regulate themselves and impose higher standards. His practice was demanding a relevant university degree, at least five years' experience and industry qualifications.
As an illustration of anger about the state of the industry, more than 200 posts responded to a Herald column raising questions about financial planners' viability if commissions were phased out.
Most of the posts were critical of the industry, with one joking: "Ninety-nine per cent of financial planners give the rest a bad name."
