Financial planners who also practice as accountants will not be allowed to charge clients commissions or asset based advice fees from July 2011 if a proposal by an accounting body goes ahead.
The Accounting Professional and Ethical Standards Board (APESB) has proposed a new industry standard that requires members of Australia's three professional accounting bodies and those who are also financial planners to charge clients on a legitimate fee-for-service basis.
The accounting bodies include the Institute of Chartered Accountants Australia, CPA Australia and the National Institute of Accountants.
"The fee for service basis in the proposed standard prohibits all remuneration practices which are based on product sales or the accumulation of funds under management, including commissions, percentage based asset fees and production bonuses," the APESB said.
The proposed APESB ban on asset based fees is stricter than the proposed government regulations, which only ban the fees when gearing is used.
It is also a step further than the more broadly based ban on commissions put forward by financial planning association the FPA.
"Inappropriate financial advice driven by conflict of interests and culminating in such fiascos as Storm Financial and Opes Prime has seen so many Australians suffer financial loss," APESB chairman Kate Spargo said.
"We have an obligation to strengthen the safeguards for clients through the introduction of stricter requirements," she said.
The new standard, APES 230 Financial Advisory Services, will be effective from 1 July 2011.
