Tougher Rules For Financial Planners

In the shadow of the GFC and in response to the recommendations made by a parliamentary Joint Committee on Financial Services, the Federal Government has proposed wide-reaching reforms to the financial services sector. The proposed reforms outline measures to improve financial planning advice in light of the failures of significant companies which destroyed the savings of ordinary investors.

The key elements of the proposed reform package include:

• a ban on remuneration structures, including commissions and payment based on sales volumes
• percentage-based fees charged only on ungeared products and only if the investor agrees
• more transparent and flexible methods for paying advisers