Industry Super Network (ISN) has put its support behind the new draft standard of the Accounting Professional and Ethical Standards Board (APESB), which includes a ban on asset-based fees for financial planners who are also accountants.
"ISN commends the independent standards setting body for the accounting profession for taking a principled stance against conflicted forms of remuneration, including commissions, asset-based fees, bonuses and other fees contingent on product sales or the accumulation of funds under management," ISN chief executive David Whiteley said.
ISN filed a submission with the APESB on Monday, speaking out in support of the proposed standard.
However, Whiteley said ISN would still accept asset-based fees if they were accompanied by an annual opt-in requirement for the continuation of financial advice.
"Industry funds have taken the view that asset-based fees have created the same problems as commissions do, because they are ongoing," Whiteley said.
"Only with an active annual opt-in can asset-based fees be part of a fee-for-service schedule," Whiteley argued.
Whiteley said the draft APESB standard would help restore consumer confidence in financial planners, following the high-profile collapses of financial advisory businesses such as Storm, Opes Prime and Westpoint.
Accountants were involved in providing financial advice in some of these cases, he said.
"If the accounting profession adopts the proposed APESB standard, it will be unparalleled in setting rigorous ethical and professional standards to ensure that their clients can trust them to deliver independent, high-quality advisory services," he said.
The APESB emphasised that the proposed standard was an exposure draft, and would be subject to change.
"The exposure draft is just that. The whole point is to take submission into account," APESB chair Kate Spargo said.
"We've got quite a lot of response. With all the information we have received, we will look at what makes the best sense."
The APESB will meet in November to discuss the submissions.
