More regulation coming for financial planners: Josh Frydenberg

The former Finance Minister Matthias Cormann wanted to repeal the Future of Financial Advice laws and deregulate financial advice.

But the Assistant Treasurer Josh Frydenberg is planning to regulate the industry, not deregulate it.

Josh Frydenberg told Business Spectator columnist Alan Kohler: “I want to act. Financial planners should operate under the same standards as accountants and lawyers: we need to boost the professionalism and ethical standards of this industry.”

Kohler noted it follows recommendations from the Joint Parliamentary Committee led by Liberal Senator David Fawcett, but the key had been the exposure of corrupt or unethical practices led by Fairfax journalist Adele Ferguson.

Kohler writes there are two types of financial planners: sales people, mainly working for banks, that are deliberately disguised as advisers and have permanent conflicts of interest, account for 80% of the industry. Then there are the genuine independent advisers trying to help savers and retirees.

Kohler writes the banks are lobbying hard against the Fawcett recommendations, but it seems Frydenberg is not listening to them, unlike his predecessor.