FSI RECOMMENDATIONS Key recommendations The following FSI recommendations are relevant to financial planners and their clients: Better product regulation  ASIC to have the tools to better prevent bad products entering the market, as well as introducing new accountability obligations on product manufactures.  Strengthen product issuer and distributor accountability and the introduction of product intervention powers for ASIC.  The removal of regulatory impediments such as tax settings for income streams, in order to provide industry with greater scope for product innovation.  Introduce a mechanism to facilitate the rationalisation of legacy products in the life insurance and managed investments sectors. General Advice  The term ‘general advice’ should be renamed to remove confusion and uncertainty with this term. Financial Planning Standards  Financial planner education standards should be raised to a relevant tertiary degree requirement.  ASIC to be provided with enhanced powers to ban individuals, including officers and those involved in managing financial firms.  An enhanced Adviser Register, which the Government is already committed to implementing. Tighter controls on remuneration  The government consider removing the stockbroker exemption from the ban on conflicted remuneration implemented by the FOFA reforms. Regulator performance  The introduction of more effective accountability measures for regulators to better ensure they meet performance indicators and implement their mandates.  The improvement of ASIC’s funding model by requiring a cost-recovery model from industry and to increase ASIC’s powers against AFSL and ACL holders. 1 FSI RECOMMENDATIONS Superannuation and retirement incomes  Further reforms to the default superannuation market, including an improved competitive process and implementation of a quality filter for MySuper products if the MySuper and Stronger Super reforms do not result in further decreases in fees.  Retirement income stream products should include longevity insurance by default. The FPA has recommended in this and other inquiries that need for longevity insurance depends on the client and their circumstances and should not be incorporated by default.  A majority of independent directors for public offer superannuation funds, as well as improved director accountability and conflict of interest regimes. AML/CTF  The Report recommends that a digital identity verification service be implemented in order to reduce the volume of hard copy documents required to identify clients. Disclosure  Reduce regulatory impediments to more innovative forms of disclosure, including online and interactive forms of disclosure across a variety of platforms.  Improved disclosure of risk and fees, with a view that the form and content of these disclosures should be focused on consumer understanding. 2