The chairman of the parliamentary inquiry into the financial services sector says he is more concerned about the quality of advice and educational level of advisers than how they are paid.

Bernie Ripoll, chair of the financial services inquiry, which was established in response to the collapse of Storm Financial, says the inquiry will be making recommendations on whether commissions for financial advice ought to be banned.

“I wouldn’t agree with you that it’s the most important part” of the inquiry, Mr Ripoll said in an interview with ABC Television’s Inside Business program on Sunday.

“The quality of advice really has turned out to be the most important part.

“We need to raise the standard in terms of educational levels of advisers and the way products are sold, and that understanding about products and the impacts of advice.”

Queensland-based advisory firm Storm Financial, which claimed to have more than 14,000 clients, went into administration in January with debts of about $80 million.

Storm had advised many of its clients to take out margin loans to buy shares with the equity in their homes as security.

When the market plunged in 2007 and 2008, the clients faced margin calls, with some being forced to sell their homes.

When dealing with margin lending and gearing, Mr Ripoll said it was particularly important that financial advisers knew their product and provided the right advice to clients.

“My view is and has been throughout this inquiry that educational standards are very important,” he said.

That didn’t mean the way advisers were paid wasn’t an important issue as well, Mr Ripoll said.

“Certainly the way it’s (financial advice) paid for and the link between product manufacturers and sales people and advisers and ultimately the client are exceptionally important,” he said.

“But in the end, the quality of advice is critical.”

AAP