The industry is celebrating after the government unveiled yesterday its overall support for the recommendations made in the Financial System Inquiry (FSI) report that are intended to improve the financial services sector.
The Financial Planning Association of Australia (FPA) has called the government's response a "win" for consumers and financial planners, highlighting its commitment to legislation that would lift adviser professional standards, amend the term "general advice", and protect the words "financial planner" and "financial adviser" from being used carelessly.
"Higher education standards are a win for consumers and pave the way for increased professionalism in financial planning," said FPA chief executive Mark Rantall in a statement.
"We are delighted that the government has listened, will consult further and then legislate to put in place needed measures to meet the financial needs of all Australians."
Also happy about the government's support to raise adviser standards is the Association of Financial Advisers (AFA), which said in a statement that its members have been calling for this reform as well.
"Our members tell us they want to improve the understanding and perceptions that consumers have of financial advice. Raising educational and professional standards plays a big part in that," said AFA chief executive Brad Fox.
Mr Fox noted that the detail of the transitional arrangements for existing advisers to meet the new standards will be "absolutely critical".
Shadow Treasurer Chris Bowen said he welcomes the government's change of heart to raise adviser standards instead of trying to unwind FOFA reforms.
"I make the point [that] one of this government's first actions was to try and unwind our Future of Financial Advice reforms which did just that. They weren't successful in doing that," Mr Bowen said.
"We welcome their change of heart if they are fair dinkum about ensuring proper standards for financial advisers. Again we'll look at the detail and we’ll work constructively with them if the proposals stack up."
Meanwhile, the Self-managed Independent Superannuation Funds Association (SISFA) has said it supports the enshrining of the fundamental objectives of superannuation within legislation.
"SISFA hopes that such a move can finally put the superannuation system on the road to broad bipartisan support, given the critical role of super within our financial and retirement system," the association said in a statement.
It added that the association is "pleased" to see that limited recourse borrowing arrangements remain part of a properly structured retirement plan – the only part of the FSI report the government decided not to change.
At the same time, several banks and CPA Australia have also voiced their support for the government's response.
CBA chief executive Ian Narev applauded the government for focusing on innovation while NAB's chief executive Andrew Thorburn said he welcomes the government's determination to focus on the need for more competition and member choice in superannuation.
ING Direct commended the government's commitment to improve the use of data to create trusted digital identities for bank customers while CPA Australia chief executive Alex Malley said the government "has got the balance right".
"The government responded in a measured and appropriate manner, with a real focus on better protections for consumers and an eye for future," Mr Malley said.
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