Australia Plans to Ban Financial Advisers' Commissions on Product Sales
Australia will ban financial advisers from accepting commission payments on products they sell as it seeks to protect investors from conflicts of interest.
The change is part of a package of measures that come into force from July 2012, Minister for Financial Services, Superannuation and Corporate Law Chris Bowen said in a statement. The Australian Securities & Investments Commission will also be given more power to ban “unscrupulous operators,” the statement said.
The new laws “are designed to tackle conflicts of interest that have threatened the quality of financial advice that has been provided to Australian investors, and the misselling of financial products that culminated in high profile corporate collapses,” Bowen said in the statement.
The Australian government is strengthening its oversight of the financial advice industry as the nation’s population ages and its A$1.3 trillion ($1.2 trillion) pool of pension savings increases. A panel of lawmakers found some retail investors had been given “inappropriate” advice to invest in Storm Financial, an advisory firm specializing in margin lending that collapsed in 2009, today’s statement said.
To contact the reporter on this story: Sarah McDonald in Sydney at smcdonald23@bloomberg.net.
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