The Future of Financial Advice package includes the following:
- A prospective ban on conflicted remuneration structures including commissions, in relation to the distribution of and advice on retail investment products including managed investments, superannuation and margin loans.
- The introduction of a statutory fiduciary duty so that financial advisers must act in the best interests of their clients, subject to a 'reasonable steps' qualification, and to place the best interests of their clients ahead of their own when providing personal advice to retail clients.
- Increasing transparency and flexibility of payments for financial advice by introducing a two-yearly opt-in arrangement ensuring that consumers are more engaged with their financial advice services and annual fee disclosure statements will provide consumers with transparency about the ongoing fees they pay.
- Percentage-based fees (known as assets under management fees) will only be charged on ungeared products or investment amounts and only if this is agreed to with the retail investor.
- Expanding the availability of low-cost 'simple advice' to improve access to and affordability of financial advice.
- Strengthening the powers of the Australian Securities and Investments Commission to act against unscrupulous operators.
- The examination of the need for a statutory compensation scheme for financial services by Mr Richard St John, who has significant corporate law experience.