The Financial Planning Association (FPA) has backed the Federal Government’s plan to review managed investment schemes.

FPA says the move, announced by the Albanese Government in its first Budget since winning the May federal election, is a step forward for the industry.

“The government's commitment to an urgent review of the regulatory framework for managed investment schemes is a welcome development,” FPA CEO Sarah Abood said.

Treasurer Jim Chalmers in his 2022/23 Budget paper released last week has provided additional funding of $2.7 million for the Treasury to support reviews of the Reserve Bank of Australia and the regulatory framework for managed investment schemes.

FPA has long pushed for changes to the proposed Compensation Scheme of Last Resort so that it will cover managed investment schemes.

The Australian Securities and Investments Commission (ASIC) says such schemes are also known as pooled investments where multiple investors contribute money or money’s worth and get an interest in the scheme. A responsible entity – also referred to as a fund manager – operates the scheme as investors do not have day-to-day control over the operation of the scheme.

Ms Abood says FPA will continue to engage with the Government in advance of the May 2023 federal budget on a number of issues that are important to its members.

The issues include broadening the base and managing the costs of the proposed Compensation Scheme of Last Resort, extending the ASIC levy freeze for another year, broad tax deductibility of financial advice, and for the Australian Taxation Office and Centrelink to improve their online access arrangements to ensure financial planners are able to act on behalf of their clients.

“We look forward to working with parties and stakeholders on policies and initiatives that contribute to affordable quality financial advice for all Australians and a sustainable financial planning profession for the future,” Ms Abood said.

The Financial Services Council (FSC) has also responded favourably to the Budget, particularly in relation to extra funding to introduce climate reporting standards for large businesses and financial institutions, in line with international reporting requirements.

FSC is also encouraged to see the Federal Budget contained no adverse changes to superannuation taxation and contribution settings.

“Stability in the superannuation tax and contribution settings ensures consumers have the confidence they need to make financial plans for their future as they battle inflation and plan for an uncertain global outlook,” FSC CEO Blake Briggs said.

“Future budgets must continue to honour election commitments to provide stability and certainty in superannuation policy settings, and an enhanced focus on structural reform and economic growth to achieve Budget sustainability – not just increased taxes.”