Part of the bill seeks to implement disclosure rules outlined by last year’s Task Force on Financial Intermediaries.

The PAA says the rules, as proposed, will not only drive out poorly performing advisers and product generators.

The changes “may also threaten the survival of sole practitioners who find their businesses lumbered with additional compliance costs which can not easily be passed onto clients.

“Further the increased requirement for disclosure may hasten the retirement of advisers nearing retirement as the cost/benefit of making substantial changes for greater disclosure has the potential to promote a change in the shape of distribution structures with advisers being forced into deal group structures similar to those operating in Australia.”

The PAA supports disclosure of commissions for financial advice but is less keen to see that extended to other fields, such as life insurance or mortgage broking.

Fees are already charged by investment advisers the PAA says, but, “we would be opposed to this level of disclosure being promulgated later to other industries where commissions rathe than fees are the normal method of adviser remuneration.”

The Financial Planners and Advisers Association, while not predicting the serious kind of consequences for the industry as the PAA does, also says the rules proposed are less than practical in some areas.

In particular, the requirement for complete ongoing disclosure, on a regular basis, of the aggregate gross returns of investments organised by the adviser and the net return to the consumer, with an explanation of the difference and a breakdown of the categories of costs, is too difficult, the FPIA says.

“The only time this is likely to be practical is when the financial adviser arranges for the investment assets to be held in a custody system….the delivery of such detailed reporting of returns should be an optional service delivery at the cost of the client, not a mandatory regulatory imposition.”