The FPA has called for the elimination of criminal sanctions for failure to provide disclosure documents.
Criminal sanctions on financial planners who fail to provide clients with a statement of advice (SOA) or financial services guide (FSG) within the current timeframes are excessive, unjust and contribute to fear and uncertainty, the association said.
"The only people likely to be caught by these strict liability provisions are honest and competent financial planners who have made administrative oversights," FPA chief executive Jo-Anne Bloch said.
"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."
Currently a planner can go to jail for up to five years for failure to provide a SOA within five days of giving advice or failure to give a client a FSG.
The Federal Government called for industry to comment on proposals to soften the sanctions for corporate law breaches. Under the proposals, only serious matters involving intentional or repeated wrongdoing would be considered criminal acts.
Bloch agreed with the Government's proposals that criminal sanction should be reserved for serious or substantial wrongdoing and civil sanctions would be far more appropriate for non-disclosure of documents.
"No other professional group in Australia attracts criminal sanctions for failure to provide clients with written advice, or to do so within five days," Bloch said.
"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."
A series of roundtables will be held next month on the issues raised in the review and an advisory group will be established.
Treasurer Peter Costello will review proposals from November.
