SYDNEY (Reuters) - Australia on Friday said it would establish a disciplinary system for financial planners by year-end, with a watchdog body to enforce it set up by 2021, as the government moves to adopt the recommendations of a sweeping financial sector inquiry.
After a year of quasi-judicial hearings, a retired judge in February gave a devastating critique of the financial sector, calling for 76 changes aimed at curbing what he called unchecked profiteering at the expense of customers.
The government, which ordered the inquiry, has vowed to act on all the recommendations. On Friday, it said it would pass a law by the end of the year to establish the code for financial planners and a policing body to enforce it by 2021.
“Restoring trust in Australia’s financial system is part of our plan for a stronger economy,” Treasurer Josh Frydenberg and Jane Hume, the assistant minister for financial services and technology, said in a joint statement.
Industry group the Stockbrokers and Financial Advisers Association was one of six groups that submitted their own proposal for a code of conduct and a self-monitoring body but withdrew it after the government plan, Association Chief Executive Judith Fox said.
“We are disappointed with the timing, but we are keen to work with the government,” she said.
The industry groups had hoped to have their system approved and in place by January, but the government’s new system would “just prolong the uncertainty” for financial advisers and their clients, she added.
The Royal Commission inquiry heard accusations that financial planners sold products customers did not need and collected fees for services never given, as well as trailing commissions that ran for years after product purchases.
Reporting by Byron Kaye and Paulina Duran; Editing by Clarence Fernandez