What a disappointment the nine-month Ripoll inquiry into financial planning has turned out to be for consumers. It's dodged the biggest issue of all - ridding financial planning of commissions and kickbacks once and for all.

The parliamentary inquiry's key recommendation to the Government is that planners should have responsibility, in law, to act in their clients' best interests only. At the moment they only have to give advice that is "reasonable".

No one knows what constitutes "reasonable" advice because financial planning operations such as the failed Storm Financial have been allowed to operate, unhindered and untroubled by the regulator, for years.

Despite a legal requirement to act in the clients' best interests being wholly inconsistent with commissions, the inquiry stops short of recommending a ban on commissions. It recommends only that the Government look into how to wean the industry off commissions.

The Australian Securities and Investments Commission (ASIC) has a better understanding of how financial planning works than anybody else.

In its submission to the inquiry it wanted the Government to ban commissions as well as requiring planners to act in the best interests of clients. It clearly understood the absurdity of having one and not the other.

The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, echoes the industry line that banning commissions would mean some people would go without advice because they would refuse to pay for it. But consumers are paying more than they should for advice anyway because of the way commissions and the kickbacks that slosh around in the background inflate investment costs.

Members of industry super funds are happy to pay fees to industry fund advisers who do not take commissions. The cost of advice becomes much more reasonable for those with simple planning needs once commissions are flushed out of the system.

Bernie Ripoll, the Labor MP and inquiry chairman, thinks how planners are paid is not that important in influencing the quality of advice.

But the evidence of Storm, Westpoint, Timbercorp, Great Southern, Fincorp - all of which involved outsized commissions to advisers and left investors with billions in losses - shows the wrongheadedness of that proposition.

Unfortunately for consumers, the inquiry has been overly influenced by the financial service industry's argument that it is already working to remove commissions and therefore the Government does not need to dictate how planners are paid.

Under the Financial Planning Association's plan, its members will end commissions from the middle of 2012. Not all planners are members of the association and it will apply to new clients only. The retail superannuation fund managers also have said that from the middle of 2012, new members of super funds will be able to switch off commissions.

Most people are not engaged with their super and are not switching to non-commission-paying funds. And many funds that have commissions also have exit fees. That means the more than $2 billion a year taken in commissions from super accounts will be protected for years to come.

Ridding financial planning of commissions is not the whole solution to the industry's problems, however.

The minimum education standard to be a planner is woeful. The inquiry could have been bolder on education standards. It's obvious, given the complexity of financial planning, that the minimum educational attainment for anyone wanting to be a financial planner is a bachelor degree. The inquiry should have recommended a three-year university course as the absolute minimum.

The Financial Planning Association agrees and is working towards this with its membership. But the inquiry recommends only that the education measures be duck-shoved to an industry-run professional standards board.

The inquiry also recommends licensing requirements of planners be more rigorous and the ASIC be given more power to police the industry and to move earlier on planners where it believes there are problems. But ASIC's failure to adequately protect consumers was always more a question of will and a mis-ordering of priorities than a lack of power or resources.

The key objective of the banks and insurers, which dominate financial services, was to protect commissions income for as long as possible. The inquiry's recommendations are a win for the industry and of only marginal likely benefit to consumers.

The industry's strategy of appearing to do just enough to hold off something far worse from Government has worked.

Rather than taking the opportunity to kill off commissions and kickbacks once and for all, as is happening in the United States and Britain, the inquiry's recommendation leaves consumers exposed to conflicted and shoddy advice.