Sherry warns of Storm Financial damage

Senator Nick Sherry has warned the collapse of groups such as Storm Financial is damaging to the reputation of financial planners.

Speaking at a function in Sydney last night, Sherry, the Minister for Superannuation and Corporate Law, noted that cases such as Storm can be detrimental to public perceptions of financial planners and expressed concern over the impact such events can have on confidence in the sector.

In his main address, Sherry covered the Federal Government’s main priorities for 2009, in particular short-selling and disclosure.

He said the Government supports the Australian Securities and Investments Commission (ASIC) imposed ban on short-selling financial stock and added it was a high priority to finalise the short-selling regulations.

Sherry also welcomed the introduction of a single national regulatory system for the financial services industry, which will follow the transfer of consumer credit and other state government regulated financial services legislation to the Commonwealth.

“For the first time, margin lending will also be properly regulated in Australia at a national level. Specifically, it will be fully regulated under the Corporations Act as a financial product, meaning a substantial increase in oversight, disclosure and consumer protection,” Sherry said.

In relation to superannuation, Sherry said the Financial Services Working Group (FSWG) is close to finalising its work on intra-product advice.

“The aim is to allow super funds to provide simple advice at the lowest possible cost to their members, on issues such as super contributions, investment options and insurance,” he said, adding that he considered this area to be one of the “largest areas of unmet need in financial planning”.

The FSWG is expected to make an announcement on intra-product advice around mid-February.