FSI looks to increase overall accountability

07-Dec-2014

By Darin Tyson-Chan

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The Financial System Inquiry (FSI) report has made several recommendations it hopes will improve consumer outcomes, including strengthening product issuer and distributor accountability, raising the competency of advisers, and better aligning the interests of financial firms and consumers.

 The FSI recommended the introduction of “a targeted and principles-based product design and distribution obligation”, with one major intention being to “reduce the number of consumers buying products that do not match their needs, and reduce consequent significant consumer detriment”.

 The report also recommended raising the competency standards of financial advisers and making the register of advisers contain more information, such as licence status, work history, education, qualifications and years of experience.

 It suggested financial advisers should have a relevant tertiary degree behind them and competence in specialised areas such as superannuation.

 In addition, the report recommended the interests of consumers and financial services firms be better aligned through ensuring remuneration structures in life insurance and stockbroking not compromise the quality of financial advice and enhancing regulator enforcement powers to allow the banning of individuals from management.

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