David Murray’s Financial System Inquiry has turned its sights on the financial planning industry.
The AFR this morning quotes industry sources saying that Murray is planning to push ahead with recommendations aimed at increasing the quality of the financial advisors and the financial advice that is being given across the industry.
Quoting sources who seem to have a guide on what the Murray Inquiry is going to recommend in its interim report in July, the AFR reports the key issue is that members of the inquiry have concerns that:
There is insufficient training for financial advisers, and that, unlike other industries, the financial advisory industry lacks professional bodies that police the educational standards of members, discipline and continuing professional development.
There are also concerns that retirees typically have low levels of financial literacy, which leaves them vulnerable to being taken advantage of by unscrupulous financial advisers.
It does sound like the focus of Murray and his colleagues on education of advisers can’t be a bad thing for the industry but this may concern the banks lobbying for the rollback of the previous governments reforms to the financial advice and planning industry under FOFA.
Likewise, the AFR says that “industry participants” say the inquiry will also look at the powers and resources of enforcement that ASIC has to monitor financial planners and advice.
Interestingly, the inquiry is said to also be investigating a perceived equity bias in plans and whether changes to the taxation treatment of deposits and perhaps even dividend imputation might could end this distortion in asset allocation.
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