Industry funds want higher standards for planners

The organisation representing industry superannuation funds has used a submission to the Treasury to argue that financial planners should be made to comply with the same level of professional standards as doctors, lawyers and superannuation fund trustees.

The Industry Super Network submission, filed with Treasury this week, strongly opposes proposed changes that would see the introduction of a sales recommendation framework and what it terms the introduction of other regulatory relief in the financial advice industry without adequate safeguards.

“Following the Westpoint scandal, the practices revealed in the ASIC [Australian Securities and Investments Commission] shadow shopping survey and the subsequent AMP enforceable undertaking, it is extraordinary Treasury would contemplate reducing consumer protection,” the submission said.

“The current consumer protections surrounding advice should be strengthened and enforced rather than eroded,” it said.

The spokesman for the Industry Super Network, Garry Weaven, claimed the proposal being canvassed by Treasury appeared to be “a backdoor attempt to remove consumer protections around superannuation switching and to legalise practices which are currently prohibited”.

Weaven said that if a legally enforceable obligation for financial advisers to act in their clients’ best interests was introduced, then meaningful industry reform could be contemplated to address concerns about compliance and the cost of advice without compromising consumer protection.