Australia to ban all offshore energy advisors
Energy advisor firms are expected to face a ban under a bill that will be tabled in the House of Representatives this week.
The bill, which has been referred to the Committee on Trade, would prohibit all offshore financial services providers from charging fees to investors.
In an email to the ABC, the Industry and Innovation Committee said that it had received a “robust and detailed” response from industry groups, but that it would take more time to fully understand the full scope of the legislation.
“We are committed to getting this right, but we are also determined to work with all stakeholders to find a way forward,” the committee said.
“The industry is not a one-size-fits-all, and we want to do everything we can to ensure that all investors have access to the best possible information and advice available.”
Energy advisor firms have been an important part of Australia’s financial system since the country’s energy independence laws were introduced in 1973.
Energy advisor fees are currently charged by major financial institutions and have been a major source of revenue for the energy industry.
But there has been concern about the role of the industry in the Australian economy, particularly because of the high costs of servicing its clients.
Last year, the Financial Services Authority of Australia said there were concerns about the industry’s ability to serve Australians, saying it was “deeply concerned” about the “potential for significant impacts on investor confidence”.
The Financial Services Council of Australia has also raised concerns about fees charged by energy advisors, with the body citing a report from the Australian Taxation Office which said fees were likely to result in higher costs for customers, particularly in areas such as mortgage repayments.
“These concerns are not new.
Energy advisors have been under scrutiny for some time and it is important that the regulatory framework for the industry be robust,” the FSCA said in a statement last year.”
This legislation will ensure the integrity of the financial services sector and help address concerns raised by investors about the quality and transparency of the energy advisers industry.”
The bill would also ban any entity or person from engaging in any transaction involving an energy advisor in which the advisor or any person involved is not the person who made the investment, unless the transaction is for the benefit of the client, the FSSA said.
In the Senate, Labor’s Andrew Leigh has raised concerns that the bill could make it more difficult for investors to access information from offshore advisers.
“I would like to see the Minister of Finance get this right,” Mr Leigh said on Monday.
“It’s very difficult to get access to advice from offshore advisors because they’re in Australia, they’re not going to be in New Zealand or Switzerland or anywhere else.”
The Australian Securities and Investments Commission says it has received numerous reports of financial services companies charging fees, but it does not comment on individual cases.
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