The Investment and Financial Services Association (IFSA), the Financial Planning Association and the Association of Financial Advisers (AFA) have welcomed the bulk of the Ripoll Inquiry’s recommendations for reform to the financial services industry.

The report by the joint parliamentary committee, chaired by Federal MP Bernie Ripoll, comes after a 10-month inquiry into financial advice issues associated with collapses such as those of Storm Financial and Opes Prime.

Key recommendations for the financial planning industry include financial planners having a fiduciary responsibility to place clients’ interests ahead of their own, a move to cease commission payments from product manufacturers to planners and the establishment of a professional standards board for financial planners.

IFSA CEO John Brogden says that much of the reform is overdue and the committee’s recommendation seeking a fiduciary duty for financial advisers is “a win for consumers and a win for the professional standing of the advice industry”.

“The debate over conflicts of interest should now be put aside, enabling the industry to move forward on a solid professional foundation.”

Mr Brogden says IFSA does not believe that ending payments to financial advisers from product manufacturers is required if the fiduciary duty recommendation is adopted.

And he’s pleased the committee recognised the need for Australians to be able to claim for payments for financial advice as a tax deduction. “This will, if adopted, put financial advice within reach of many more Australians.”

The issue of commissions versus fees has proved controversial, with the FPA foreshadowing a move away from commissions in its submission to the inquiry and the rival AFA advocating the consumer’s right to choose.

AFA CEO Richard Klipin says he is pleased with the recommendations, including stopping short of recommending a ban on commissions.

“Remuneration is a complex issue and the AFA is pleased the committee chose to recommend the Government take a consultative approach to the issue,” he said. “We believe consumers should always have a choice in the way they remunerate their advisers.”

FPA CEO Jo-Anne Bloch says the committee’s recommendations are a “sensible and practical” package of changes to strengthen the regulatory framework for financial advice in Australia.

“There is no one silver bullet that will prevent a Storm Financial,” she said.

The National Insurance Brokers Association (NIBA) CEO Noel Pettersen says the report gives little consideration to life risk insurance and virtually none to general insurance. “NIBA is concerned that solutions to problems evident in the investment arena might be foisted onto the risk insurance sector.”