Financial advisory groups have generally welcomed the reforms announced yesterday by Financial Services Minister Chris Bowen.

Included among the package is a ban on commissions paid on retail investment products, a statutory fiduciary duty on planners to act in clients’ best interests and wider regulatory powers of intervention.

The Association of Financial Advisers says the “broad thrust of the Government’s response is sensible,” but says it has some reservations.

It calls for the introduction of choice in regard to fees versus commissions and says it is concerned about new wide-ranging regulatory powers. The association also fears simplified financial advice could “dumb down” standards.

But it applauds the decision not to include life insurance as part of the ban on commissions.

Investment and Financial Services Association (IFSA) CEO John Brogden says the reforms are “a win for consumers” that will “build trust between financial advisers and the community”.

Mr Brogden says IFSA supported a ban on commissions and a fiduciary duty for advisers in its recent charter, and calls on the Federal Government to “go the next step” and make all financial advice tax-deductible.

Acting Financial Planning Association CEO Deen Sanders says the reforms will assist industry transparency and investor protection.

“Given the scale of the reform package, there will be positive and negative impacts on the advice industry, so implementation will take time and require careful consideration.”