Australia’s biggest financial planning firms have successfully transitioned to the new fee-for- advice model, two years ahead of the Federal Government’s deadline.

Last Thursday Axa Asia-Pacific, MLC/NAB and AMP spearheaded the new financial planning policy, with commission payments to more than 5600 planners across the three firms either scrapped or provided as an option to clients.

While the Federal Government has mandated a ban on commission payments by July 1 2012, some planners have temporarily retained them as an optional payment method.

MLC, one of the first to switch to a fee-for-service model in 2006, announced last week all new clients purchasing investment and superannuation products would be charged using the new model.

Subsidiaries Garvan Financial Planning, Apogee Financial Planning and MLC Financial Planning are now commission-free, joining Godfrey Pembroke and NAB Financial Planning, which made the switch in 2006 and 2008.

MLC Advice and Marketing Executive GM Richard Nunn describes the transition as a milestone in transparency and trust.

“Back in 2006, our views around fees and commissions were not popular,” he said. “The sooner our industry makes the transition, the quicker we can start to build greater trust in our industry.”

AMP spokesman Sarah Hudson told insuranceNEWS.com.au more than 1600 financial planners at AMP are now charging fees for advice.

AMP will retain commission payments for the time being, but only if the customer chooses them after an “explicit conversation between the adviser and the customer on how the remuneration is done”.

Another 1600 planners at Axa have also made the switch. Unlike AMP and ANZ, Axa will only offer fees as a payment option.

Axa’s “Future Ready” program to convert the business to an advice-based model has taken three years to complete.