Radical proposals in Australia

Author: | Published: 1 Oct 2009

The financial services regulator, the Australian Securities and Investments Commission (Asic), proposes some fundamental reforms to the financial services industry. If adopted, they will radically reshape the delivery of financial advice and affect the broader industry. As with other regulatory responses around the world to the global financial crisis, there is a question as to whether these reforms are necessary and proportionate. As least some aspects of Asic's proposal are out of step with the position of other regulators, and arguably go too far.

Asic would ban a broad range of commissions and other payments to financial advisers, and impose a fiduciary-style statutory duty on advisers. It has also raised the prospect of restricting access to products for retail investors. Interestingly, Treasury, the federal government department predominantly responsible for the financial services sector, is concerned about a number of Asic's proposals and has recommended a more cautious and measured approach....