Recommendations in the final FSI report propose new duties for issuers and distributors of financial products relating to the design and method of distribution of products. ASIC will also have a new 12 month temporary product banning power (which can be extended by Government) to pause the development of new products if it has significant concerns about whether they achieve their claimed benefits or are suitable for targeted clients.

The risk with this approach, of course, is that the new duties and ASIC's new power will stifle innovation in the sector (whether or not ASIC's power is ever used).

While a key objective of the Report is to ensure customers have the best chance to receive the products they need, any reduction in the range of products available to retail clients may ultimately have the opposite effect.