Feds say new finance reforms will benefit more Australians
The federal government has assured on Monday that more Australians will be given access to affordable and simple financial consultations once the proposed reforms in the financial products and services are implemented, which should address rampant conflicts of interest that have allegedly led to dubious finance advisories and misrepresentation of products.
Financial Services Minister Chris Bowen told AAP that the Future Financial Advice suite embodies three major reforms: financial planners shall be prohibited from receiving commissions; financial planners are now required to decide in the best interest of clients and; much reasonable finance advisory fees will be expanded.
Mr Bowen said that the expanded reforms, which were introduced following an inquiry on Storm Financial and Opes Prime's collapses last year, will mainly benefit those who are unable to access financial services and Australia's ageing population.
He said that the two group's greater access to sound financial advice is a significant part of looking comfortably ahead and plan for the future.
Mr Bowen added that the reform package will also require advisers to maintain neutral charging structure, give more power to the Australian Securities and Investments Commission (ASIC) in running after erring operators and put up an expert panel that will scrutinise professional standards.
He said that the removal of commission and improvement of professional standards, which will take effect by July 2012, should redound to Australian investors getting the best financial advice available instead of being lured to products pushed by financial advisers who are after their incentives and commissions.
However, AAP has reported that opposition leader Tony Abbot scored the new laws and said that their implementation could possibly hurt small businesses, adding that it is wrong to totally bar advisers to receive commissions as he stressed that "if the commissions are up-front and transparent I don't necessarily have a problem with that."