The Investment and Financial Services Association (IFSA) wants the Federal Government to enact reforms to deter money-laundering and help identify illegal transactions.

CEO Richard Gilbert said the financial services industry has been calling for a number of years for a thorough review of the requirements to identify customers of managed funds.

He said identification requirements are antiquated and “basically designed for banks with a large branch network. Moreover, they were designed before the massive uptake of electronic transactions, and simply do not work for online transactions.”

Mr Gilbert said the current system will result in higher costs for ordinary “mums and dads” investors. “The industry wants a solution to this issue which is effective in identifying customers while not imposing unnecessary costs on the industry and consumers,” he said.