Cormann warns on one size fits all

The Minister for Finance and acting Assistant Treasurer, Senator Mathias Cormann has cautioned against a "one size fits all approach" to the provision of financial advice.

Commenting on recent submissions to a Senate Committee and, in particular, the Financial Planning Association's (FPA's) 10-point plan aimed at more effectively separating product sales from advice, Cormann said he always warmly welcomed any initiative by the financial advice profession to improve its professional and service standards.

"I would caution though against a one size fits all approach," he said. "There are necessarily different business models available in the market and that's a good thing. Diversity in the financial services market provides choice and helps deliver the best possible value for consumers."

Cormann said he believed the best outcomes for consumers were achieved from "robust competition, not only between individual businesses, but also between different business models".

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"Ultimately, of course, in an appropriately well-informed, transparent, efficient and competitive market, the best judge of what is in a consumer's best interest and what service proposition best suits an individual consumer's needs and circumstances is the consumer him or herself," the minister said.

"The government recognises the important service financial advisers and financial planners provide in helping people maximise their financial health and well-being, by helping people manage financial risk and maximise opportunities," Cormann said. "But we also recognise the need for appropriate consumer protections through properly-targeted regulatory arrangements."

"In that context though, as I have said many times in Opposition and now in Government, we need to ensure that we have the balance right between appropriate levels of consumer protection and making sure that access to high quality financial advice remains available and affordable for all."