Confidence in financial planners needs to be restored

The Financial Planning Association (FPA) is lobbying MPs to introduce new laws that will help to restore faith in the sector after a storm of criticism over its practices.

In an open letter to MPs, the group calls for a series of tax breaks that will help to avoid the commission culture that has caused scandal in recent months.

Widespread scepticism has emerged over the way that financial planners will recommend home loans, savings accounts, term deposits and other products based on the level of commission they will receive.

Meanwhile, the industry’s independence has also been called into question after it emerged that Australia’s biggest banks were leaning on financial planners to shift more of their home loan products or face paying fees to reapply for affiliation with the institutions.

Setting out the case for reform, FPA chairperson Julie Berry and chief executive Jo-Anne Bloch wrote in the letter: "Consumers will then know that if they are seeing a genuine financial planner, they would be getting expert, qualified advice that they can rely on and trust."

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