The Productivity Commission has recommended every AFSL be required to list the proportion of in-house products on its APL and that general advice be renamed.
The Productivity Commission has released its final report on competition in the financial system, with a raft of recommendations for the advice industry.
The report has called for an overhaul of the way APLs are presented to consumers.
Specifically, AFSLs should be required to disclose the number of products on their APL as well as the proportion of in-house products on it.
Every AFSL should be required to disclose the proportion of recommended in-house products that are on the APL as well as the proportion of off-APL products that are recommended.
The Productivity Commission has also recommended that general advice be renamed, saying that it is currently up to consumers to know ‘intuitively’ that it is “like marketing”.
"General advice, as defined in the Corporations Act 2001 (Cth), is a misleading term and should be renamed," said the report.
"Any replacement must ensure that the term ‘advice’ can only be used in association with ‘personal advice’ – that is, advice that takes into consideration personal circumstances."
The new term should be tested with consumers and in place by "mid-2020", the report recommended.
The report also recommends the creation of a new class of licence that would allow advisers to advise on home loans.
"ASIC should assess the feasibility of financial advisers providing advice on home loans and other credit products, via a new AFSL that would not require a separate Australian Credit Licence to be obtained," the report said.
"This assessment should examine the costs and benefits of a new licence, the consequences of various remuneration models and the applicability of a principal integrity officer."
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