The recommendations of the Ripoll Inquiry into financial services have gained bi-partisan support, with the Federal Opposition backing the final report of the Joint Parliamentary Committee on Corporations and Financial Services.
The opposition spokesman on financial services, Chris Pearce, said he supported the committee’s 11 recommendations as a solid foundation for further improvement in the industry.
“There is no, one silver bullet, but the Committee’s recommendations are far reaching and substantial,” he said.
“I strongly support the recommendation that the Government amend the Corporations Act to explicitly include a fiduciary duty for financial advisers operating under an AFSL.”
Pearce said it was important that financial advisers be required to place their clients’ interests ahead of their own.
“I believe this would have the dual benefit of further improving consumer protection and lifting industry standards,” he said.
The Opposition spokesman said that while the financial planning sector had, itself, proactively embraced the need for reform, “the industry must step up and whole heartedly address the controversial issue of conflicts of interest and the role that remuneration plays in managing potential conflicts”.
However, he said any changes to the remuneration structure of financial advisers had to be clearly compatible with the introduction of a fiduciary duty.
Pearce said the recommendation that the Australian Securities and Investments Commission (ASIC) immediately begin consultation with the financial services industry on the establishment of an independent, industry based professional standards board to oversee competency and conduct standards for financial advisers should be adopted by the Government with all haste.
He said such an initiative would, without question, increase professionalism within in the Australian financial services sector.
