3 May 2010

Legislation ahead for financial planning industry

4:10 pm on 3 May 2010

The federal government in Australia is to crack down on shady practices in the financial planning industry.

In response to a review of the industry, following a series of scandals, the Rudd government will legislate to ban commissions and other conflicted pay structures.

The ban will apply from July 2012 to allow the industry to get its house in order.

The government also will introduce a statutory duty for advisers to act in the best interests of their clients.

Radio New Zealand's Sydney business correspondent says the reforms have been broadly welcomed in the industry.

They are seen as likely to bolster the standing of professional advisers - distinguishing them from what in effect are salespeople for banks and insurance companies.