Planners hit super proposal
The financial planning body has hit back at the prospect of increased professional indemnity insurance requirements flagged as part of the government's moves to cut investment fraud in superannuation.
The Gillard government has left open the door for an industry-wide "last-resort" compensation scheme for losses racked up by super funds including the self-managed sector, which comprises about one-third of Australia's $1.5 trillion super pile.
The government also said it would consult on possible changes to boost the professional indemnity insurance requirements of financial services providers.
"First, to improve the capacity of a licensee to pay compensation when required at levels assessed to be adequate for their business," it said. "Second, to provide a more rigorous regulatory platform for considering a last-resort scheme in the future, which is more in keeping with other parts of the financial system where last-resort schemes apply."
But the Financial Planning Association said increased requirements would "simply increase costs and further restrict financial advisers in servicing consumers due to increased costs and red tape".
The moves are part of a response to a parliamentary committee investigation into the 2009 collapse of Trio Capital.