Advice groups should be proactive in devising professional and ethical commitments for their advisers that go beyond the Corporations Act as the industry was ultimately heading toward further regulation to shore up consumer protection, according to Fortnum Private Wealth.
In a new white paper, “Building a Professional Advice Framework”, Fortnum group chief executive Neil Younger and managing director Joel Taylor said that despite a raft of new regulations being introduced to financial planning in recent years, there were still problem areas that were likely to lead to further legislative action.
These included a lack of restrictions around dealer group ownership, subsidisation of adviser licence fees by institutions and the narrow range of products permitted to be on aligned advisers’ approved product lists.
“They all point to an under-regulated industry with major shortcomings when it comes to consumer protection,” the report said.
“Therefore, it’s dangerous for advisers to rely on the Corps Act for guidance on how to meet their best interest duty obligations – they need to have a set of professional principles to guide them.”