Media Release
Tuesday, 24 November, 2009
Inquiry recommendations put financial advice on right track
Recommendations by a parliamentary inquiry into financial products and services were an important
step toward strengthening industry standards, CPA Australia has said.
Amendments to the Corporations Act to safeguard clients’ interests, increased resourcing for ASIC as
the main enforcement agency and requirements for advisers to more clearly communicate the
restrictions on the type of advice they are able to provide, are among a number of recommendations
CPA Australia has called for in the past.
“The recommendations, if adopted, would ensure the tightening of industry professional standards, give
ASIC greater powers of enforcement and surveillance, and generally improve the reputation and
credibility of the industry,” said CPA Australia Policy and Research General Manager Paul Drum.
“These are among a range of initiatives CPA Australia has called for in its discussions with government
over a number of years.”
CPA Australia also welcomed other recommendations including the tax deductibility of financial advice,
the eradication of soft dollar benefits from third parties - which could place advisers in conflict between
their interest and those of their client.
The requirement that agribusiness managed investment schemes (MIS) licensees to demonstrate that
they have sufficient working capital to meet current obligations was also welcomed.
“We would in fact prefer to see this latter recommendation go a step further and that ASIC or an
equivalent body be given full access to the past returns of any agribusiness MIS and that this
information be made publicly available” Mr Drum said.
On the establishment of a professional standards board to oversee the industry CPA Australia looks
forward to discussing its possible structure and function with the government and other stakeholders.
“This is an issue that would need to be thought through in detail. Any board established would need to
work effectively with ASIC and not merely add a layer of red tape and inefficiency,” Mr Drum said.
Media Enquiries: Licardo Prince, External Affairs Executive, 03 9606 9746/0401 777 917
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