The financial services industry has conflicts of interest that undermine trust because they affect the quality of advice and products, according to Australian Consumers' Association CEO Peter Kell.

Speaking at last week’s Investment and Financial Services Association conference, Mr Kell said fund managers and financial planners must be more co-operative and seek collective solutions.

He said disclosure alone is not enough to restore consumer confidence, despite the industry’s increased transparency and better explanation of costs.

“Consumers would prefer to see bad practices eliminated rather than disclosed,” he said.

In his speech – The Industry Holds the Key to its Future? – he said solutions to the problems related to the lack of confidence in planners and the industry by consumers must be found, and if the situation was not improved consumer trust would continue to be eroded.