Commission for advisers ‘unsustainable’: FPA
The Financial Planning Association (FPA) has recommended to the Federal Government that financial planners be paid entirely through fees rather than commissions from 2012.
The bold move by the FPA to move advisers away from commissions could have long-term implications for general insurance intermediaries, most of whom receive commissions from insurers.
FPA CEO Jo-Anne Bloch says a move away from commission-based remuneration will protect not only consumers but also the reputations of financial planners.
“While people should be free to choose how to pay a financial planner, removing commissions will dispel accusations of conflict of interest,” she said.
“Continuing the commission-based regime is unsustainable and will only act as a disincentive to people utilising financial planners.”
The FPA has asked its members and the broader community to respond to a consultation paper arguing that changes to the current remuneration practices are necessary to reduce the potential for bias and improve industry sustainability and consumer confidence.
The bold move by the FPA to move advisers away from commissions could have long-term implications for general insurance intermediaries, most of whom receive commissions from insurers.
FPA CEO Jo-Anne Bloch says a move away from commission-based remuneration will protect not only consumers but also the reputations of financial planners.
“While people should be free to choose how to pay a financial planner, removing commissions will dispel accusations of conflict of interest,” she said.
“Continuing the commission-based regime is unsustainable and will only act as a disincentive to people utilising financial planners.”
The FPA has asked its members and the broader community to respond to a consultation paper arguing that changes to the current remuneration practices are necessary to reduce the potential for bias and improve industry sustainability and consumer confidence.