Advisers will develop their own solutions on remuneration and standards rather than waiting for regulation, according to the Association of Financial Advisers (AFA).

CEO Brad Fox says the time is right for self-directed responses from the industry.

“In recent months we have seen excellent examples of licensees stepping up to take leadership positions on issues such as adviser education standards and professional association membership,” he said.

“There is a clear opportunity for licensees to implement their own solutions, particularly in relation to replacement insurance advice and adviser remuneration.”

Mr Fox says many advisers have already started moving away from high upfront commissions to more sustainable hybrid models.

“I would not be surprised if we see announcements from licensees mandating new standards ahead of an industry-wide solution being agreed,” he said. “I think it is totally conceivable that some licensees will seize on the opportunity to address consumer perceptions by mandating that their advisers accept no more than a hybrid payment.

“This would certainly have the AFA’s support.”

Mr Fox says the AFA has always maintained the industry can provide solutions to issues raised in the Australian Securities and Investments Commission’s report on the life insurance industry.

“Insurers, advisers, licensees and professional associations all have to carry their share of the load, but no one has to wait for the others to move first,” he said.

“Some clear industry leaders will emerge.”