Australians to receive cheaper financial advice in future

16:38, April 26, 2010      

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More Australians will have access to low-cost, simple financial advice under a series of major reforms to the sector, the Australian federal government announced on Monday.

Financial Services Minister Chris Bowen said the Future of Financial Advice reforms were designed to tackle conflicts of interest that had threatened advice quality, and the mis-selling of products.

The package contained three key changes: financial planners will no longer be able to receive commissions; they'll be legally required to act in the best interest of clients and affordable financial advice services will be expanded.

Given Australia's aging population, Bowen said accessing sound advice was an important part of planning for the future.

"The expansion in the provision of low-cost, simple advice will be of particular benefit to individuals and families who may not currently have access to financial advice," Bowen told Australian Associated Press.

Requiring advisers to have their own "product neutral" charging structure, boosting the Australian Securities and Investments Commission's powers to act against doggy operators and establishing an expert panel to review professional standards were also part of the suite of reforms.

"These reforms will see Australian investors receive financial advice that is in their best interests, rather than being directed to products as a result of incentives or commissions offered to the financial adviser," Bowen said.

"I welcome the significant efforts of industry ... to remove commissions and improve professional standards - these reforms clearly support their efforts."

Most of the changes will apply from July 1, 2012.

Source: Xinhua


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