Chan & Naylor Wealth Planning partner David Hasib argued for the establishment of a single regulatory authority to oversee the financial planning, accounting and insurance industries – with a common standard for corporate governance and education.
Both the financial planning and accounting industries have "missed the boat" – with the former closely scrutinised and penalised over recent years, and the latter simply failing to "step up to the plate", according to Chan & Naylor.
"Whilst the financial services industry has been too forward looking, the accounting industry has been too backwards looking," said Mr Hasib.
"Meanwhile, the insurance sector has been allowed to morph itself into the financial advice profession as the Australian financial system itself has been blind-sided by hidden agendas, conflicted interests and ineffectual financial literacy standards," he said.
Until these "discrepancies" are resolved, it is consumers who will "bear the brunt" of the industry shortfall, said Mr Hasib.
"Put simply, the financial sector has dropped its duty of care to Australian consumers," he said.
The Financial System Inquiry represents an opportunity to restore the fiduciary client relationship, said Mr Hasib.
"Australia requires a cross-industry level playing field ruled by a common standard of corporate governance, education (both for industry and consumer) and ultimately one regulatory authority overseeing the collective investment industry," he said.
"There is no recourse on the real estate industry should a $1 million off-the-plan property investment sour. This is not the case for financial planners or dealer groups," said Mr Hasib.
"Whereas ASIC controls dealer groups, planners and manufacturers, who is controlling the real estate agents, mortgage providers, banking sector and SMSF providers?" he asked.
ASIC should be at the forefront in upholding a "widely recognised code of conduct that provides clear and consistent compliance guidelines for all areas of investment and related advice", said Chan & Naylor.
If this is not achieved, financial services risks becoming "an even more disjointed environment, allowing the unscrupulous to fly under the radar and prey on vulnerable consumers", said Mr Hasib.
"This will necessarily require ASIC’s reactive response to put out spot fires and rule with an iron fist rather than educational agenda," he said.
"The question is, how many more Storm Financial or Trio Capital collapses does Australia need before we realise that self-regulation is not working for the common good?" said Mr Hasib.
