On 24 November 2009, Investor Daily reported that the Parliamentary Joint Committee (PJC) on Corporations and Financial Services Inquiry into Financial Products and Services in Australia had released its recommendations. The recommendations focused on, but were not limited to, financial advising. 

The most significant recommendations are detailed below. The recommendations will require changes to legislation, regulations, regulator powers and an increased reliance on industry associations. Key recommendations are:

• Recognition the fiduciary duty by financial planners to put the interests of their clients first
• Overhaul of commission payment system to avoid conflict of interests and volume bonuses
• Making the cost of financial advice tax deductible for consumers.
• ASIC to work together with the industry to form a professional standards board that advisers would be required to join. The body would establish, monitor and oversee competency and conduct standards.
• ASIC to be resourced to perform risk-based surveillance of the advice provided under an Australian financial services licence.
• Extending ASIC powers to remove individuals and licensees from providing financial services.
• The government to investigate options for a last resort compensation scheme

These recommendations were the result of a significant consultation process and have been welcomed by many industry associations. As reported in Investor Daily’s article, FPA chief executive Jo-Anne Bloch said the recommendations will improve professional standards in the industry. "Recognising that duty of care is a fiduciary duty enshrined in law will lift the conduct and standards of the industry. Giving ASIC risk-based surveillance powers is proactive regulation," Bloch said.

For further information please see PJC Article