Oz to ban commission fees for advisers

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Australia is to ban financial advisers from accepting commission payments on products they sell as it seeks to protect investors from conflicts of interest.

The move comes as New Zealand finalises a draft code of conduct for its advisers, which says they must place their clients' interests first but does not go as far as banning commissions.

New regulations setting a minimum standard of qualification and ensuring all advisers are registered are due to come into force in December.

The Australian changes are part of a package of measures announced by Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen. They come into force from July, 2012.

He said the Australian Securities and Investments Commission would also be given more power to ban "unscrupulous operators".

The new laws "are designed to tackle conflicts of interest that have threatened the quality of financial advice that has been provided to Australian investors, and the mis-selling of financial products that culminated in high profile corporate collapses."

The Australian Government is strengthening its oversight of the financial advice industry as the nation's population ages and its A$1.3 trillion ($1.67 trillion) pool of pension savings increases.

A panel of lawmakers found some retail investors had been given "inappropriate" advice to invest in Storm Financial, an advisory firm specialising in margin lending that collapsed last year.

- BLOOMBERG