Ethics classes for financial planners should be fundamental to proposed new education standards, with self-regulation a near impossible benchmark for the profession, two industry bodies have said.
In a submission to the Parliamentary Joint Committee on Corporations and Financial Services, Industry Super Australia and the Australian Institute of Superannuation Trustees (AIST) said ethics training was key to restoring investor confidence.
"The reputation of the financial advice industry is in tatters. Improved educational standards are important, but iron-clad consumer protections that remove conflicts of interest are the foundation for community trust," ISA chief executive David Whiteley said.
"The efforts of the industry to address educational requirements, while lobbying for a ‘claytons' best interests duty and the return of sales incentives, is contradictory and will significantly retard achievement of professional status.
"In short: the last thing this industry needs is what effectively amounts to more qualified sales advisers."
Both bodies said they supported lifting education standards for planners, but said self-regulation will never work.
"When you look at the serious problems in the financial planning industry, and the trauma this has caused so many Australians, to hand the keys back to the industry at this time would send a very bad signal to investors," Whiteley said.
