View more on these topics

Australia adopts its own RDR

Australia is the latest country to follow the UK in overhauling financial services regulation with plans to adopt retail distribution review-style reforms.

The Australian government published the latest measures as part of its Future of Financial Advice reforms in April, which builds on proposals first put forward in April 2010.

The Australian measures include a ban on commission, with a prospective ban on upfront and trail commission relating to life insurance policies sold as part of superannuation, or retirement saving, packages. Other insurance commission is unaffected.

One proposal under discussion is a requirement for advisers to ask clients to opt in and confirm their advice agreement every two years.

The Australian government is also considering expanding its version of simplified advice to include scaled advice, which would provide specific advice for a client on a particular product type or provide advice about a limited range of issues.

It is also looking to explore whether it should restrict the use of the terms “financial planner” or “adviser” and if they should be defined under Australia’s Corporations Act.

As part of the reforms, a consultation is also under way about establishing a statutory financial services compensation scheme. Currently, if a retail client of a regulated firm is awarded compensation by an external dispute resolution scheme or a court, they are unlikely to be paid if the firm becomes insolvent.

The Australian government expects draft legislation to be published mid-2011, with rules effective from July 1, 2012.

Financial Planning Association of Australia chief executive Mark Rantall says: “Our main concerns are the banning of risk insurance commissions in superannuation and the confirmation of opt-in.

“Getting the detail right will have a significant impact on the success of the reforms.”


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Increasingly Frustrated Adviser 13th May 2011 at 9:15 am

    Oh well. Thats that escape route for me closed. I was looking forward to emmigrating to Oz to avoid RDR. Any other ideas to avoid regulation folks?

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm