Among 44 formal recommendations in the 320-page report, the Murray Inquiry committee has suggested greater disclosure of financial advice industry business models and ownership structures.
“Often consumers do not understand their financial adviser’s … association with product issuers. This association might limit the product range an adviser or broker can recommend from,” the report concluded.
While it makes clear the committee has not seen “evidence of differences in the quality of advice from independent or aligned and vertically integrated firms”, the report suggests transparency of ownership will have inherent benefits for consumers and the industry.
Specifically, the report recommends that disclosure of ownership and alignment go beyond the current requirement to disclose within a Financial Services Guide, suggesting “branded documents or materials” as a solution.
Responding to questions from ifa at a press conference in Sydney today, former CBA boss David Murray explained the thinking behind the recommendation for increased disclosure, describing it as a sign of an imminent “paradigm shift”.
“There is an information asymmetry and a knowledge gap and an information imbalance between consumers in the financial system and product providers and distributors,” Mr Murray said.
However, the report stops short of recommending a UK-style differentiation between “independent” and “restricted” advice, as flagged by ASIC in its second FSI submission.
Treasurer Joe Hockey today announced the government will “carefully consider” the recommendations, seeking stakeholder feedback until March 2015.
[quote name=”Denis Scanlon”]Well! Someone must have finally told Mr Murray!
Often consumers do not understand their financial advisersassociation with product issuers.”
How utterly profound!
Tax payers actually pay money for conclusions such as these! Its about time there were disclosures instead of talking about eminent examples of shift!
Mr Hockey don’t you think you’ve had enough time to “carefully consider” the recommendations? Or is the government too busy flogging the budget defence, to deal with such crucial recommendations as in a 320 page report!
About time these people stopped blaming and actually started to implement change for the good of the society they are paid to serve.[/quote]
here here
….14 years to finally realise that the industry has a flaw in the system!
I’ve held the view that Auth Reps must NOT be employed, engaged, contracted etc by Product Providers. You’re either licensed as a financial services adviser OR financial services product provider….NOT both.
J
Well! Someone must have finally told Mr Murray!
Often consumers do not understand their financial advisersassociation with product issuers.”
How utterly profound!
Tax payers actually pay money for conclusions such as these! Its about time there were disclosures instead of talking about eminent examples of shift!
Mr Hockey don’t you think you’ve had enough time to “carefully consider” the recommendations? Or is the government too busy flogging the budget defence, to deal with such crucial recommendations as in a 320 page report!
About time these people stopped blaming and actually started to implement change for the good of the society they are paid to serve.