REGULATIONS governing Hong Kong's financial planning industry are poor compared with those in Britain and Australia, according to local advisers. In Britain, before entering the industry advisers must pass the first stage of the recently introduced Financial Planning Certificate. They are also required to stay up to date on investment matters. Another glaring omission in Hong Kong's regulations, and particularly successful in Australia and Britain, is the ''best advice'' concept, advisers say. Introduced in Britain in the late 1980s, this requires financial planners to be able to demonstrate that the financial advice and recommendations they have given to a client represent the best and most appropriate course of action. The nearest provision to the ''best advice'' concept in Hong Kong is the SFC's code of conduct but advisers say this falls a long way short. According to a consultant with Bentley Reid and Thomas, Melanie Nutbeam, Australia's financial planning industry is regulated closely by the Australian Securities Commission (ASC). ''Australia has been through all the problems now being experienced in Hong Kong,'' said Ms Nutbeam, ''and the ASC has been given real powers to police the industry.'' A major distinction between regulatory controls in Britain and Australia and those in Hong Kong hinges on the framework provided by industry groups that help to devise and oversee professional standards. In Australia this role is carried out by the Financial Planning Association, and in Britain planners are controlled by the Financial Intermediaries and Brokers Regulatory Association, while tied agents are controlled by the Life Assurance and Unit Trust Regulatory Organ. As well as these industry groups, Britain now has the Personal Investment Agency, which was launched earlier this month and will look after the interests of small investors. The latest initiative to be introduced in Britain is the hard disclosure rule. This comes into effect on January 1 next year and will force financial planners and other life insurance sellers to tell clients at the point of sale how much commission they will earn by selling insurance-linked products, as well as give details of early surrender values. Importantly, the surrender value will be given in cash terms and not as a percentage, making it clear to the policyholder how much of his or her premiums will go to the adviser. Similarly, financial advisers in Australia who sell insurance-linked investments must declare their financial interest in the plan they are selling to clients. Financial planning consultant Neil Baskerville said similar disclosure legislation would benefit Hong Kong as many people were being misled about hidden costs. However, Hill Samuel financial services director Barry Lea said Hong Kong still had a long way to go before it reached the stage where a similar rule could be adopted. ''It's no good having a disclosure rule if the products being sold to investors are completely inappropriate,'' he said. Like Hong Kong, the United States is also struggling to formulate regulations for its financial planning industry. New proposals by the Securities and Exchange Commission are viewed as inadequate.