The financial advice industry will be one of the first areas of inquiry for the royal commission, according to the senior counsel assisting the commission Rowena Orr.
Speaking at the commission’s first public hearing, Ms Orr said that while home loans will be the first area to be scrutinised by the commission, financial planning and wealth management will also be an “area of early focus.”
“Australians engage financial advisers to improve their financial position, to achieve their aspirations, and to plan for their future,” Ms Orr said.
“Clients repose trust and confidence in their financial adviser, it is important their trust and confidence is well placed.”
Ms Orr cited figures published in the 2009 parliamentary joint committee report on corporations and financial services to highlight the scope of the advice sector.
“At the time of the 2009 report, there were approximately 18,000 financial advisers in Australia, close to 8,000 financial planning practices, and around 160 dealer groups operating in Australia,” she said.
“As these figures reveal, the financial planning and wealth management industry is large and complex.”
According to Ms Orr, the commissioner – High Court Justice Kenneth Hayne – will release a document in the next few months that will update these figures, and subsequently “indicate the areas of particular inquiry” regarding financial advice at “a later point”.
Ms Orr also noted that financial advice dealings accounted for 9 per cent of the submissions received by the royal commission thus far, compared with 31 per cent for personal finance, 17 per cent for superannuation and 12 per cent for mortgage broking.
The contrast between financial advice and mortgage broking-related submissions comes less than a week after Peter White, executive director of mortgage broking industry association FBAA, said advisers were responsible for “a majority of issues” between the two industries.
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