Product manufacturers should be banned from holding financial services licences for advice, the Professional Standards Council says.

The recommendation features in a research paper on professionalism in financial services, which forms part of the council’s submission to a Parliamentary Joint Committee on Corporations and Financial Services inquiry.

“The introduction of professional advice licence models could allow for the introduction of prohibition of conflicts between licence models for product manufacture and professional advice to consumers,” the paper says.

“Alternative models that prohibit licences being held by entities for product manufacture and advice might also be useful considerations.”

The council says licensing reforms should give regulators greater power to withdraw licences across a range of product and advice spheres.

It calls for “legislative reform that would encourage individual obligation and professional differentiation, including potential for liability reform”.

The council wants groups that achieve higher levels of compliance to receive recognition benefits, less regulation and involvement in the consultation process for new legislation.