Home / Life Insurance / Adviser slams ‘hijacked’ commissions debate
11 June 2019
The Federal Government and corporate regulator’s “obsession” with conflicted remuneration is blinding them to the need to ensure consumers have access to financial advice, a leading adviser warns.
Connect Financial Service Brokers CEO Paul Tynan says advice will become unaffordable for most people if all recommendations of the Hayne royal commission are implemented, forcing the Government to provide access to affordable advice in the areas of aged care, retirement planning, superannuation and debt management.
These issues will be magnified in regional Australia, which already suffers from a lack of advisers and proper connectivity, he says.
“Government, the Australian Securities and Investments Commission and the associations… have failed to understand why commissions were developed to be paid out of product and why this concept came about globally within financial services,” Mr Tynan says.
“Commission in these products had no connection with the ongoing servicing of clients and was developed ‘in product’ because the consumer could not afford or would not pay for the advice.”
Mr Tynan has attacked vested interests and major players pushing for the restructure, warning there is strong evidence they believe face-to-face advice should be only for those who can afford it.
Most people will have to access robo-advice and other impersonal technology, he warns.
“The Canberra bubble and self-interest groups have completely hijacked the advice debate and subsequent decisions have been made with no understanding about the effect this will have on consumers, their needs and affordability.”
Mr Tynan warns the industry will struggle to attract a new generation of advisers due to education debt, over-regulation, the industry’s tarnished reputation and an unfriendly business environment.