Consumers will pay an extra $1.7 billion in fees over 14 years if opt-in legislation is removed from the Future of Financial Advice regime as proposed, a study shows.

People will pay for advice they do not receive, because they will not have the option of cancelling their agreements with financial advisers, according to the research by actuary Rice Warner for Industry Super Australia (ISA).

The report also says grandfathering of commissions sought by financial advisers will lead to consumers being charged an extra $2.8 billion over 14 years.

ISA CEO David Whiteley says the multibillion-dollar impact explains banks and financial advisers’ relentless lobbying to reduce consumer protections.

“The report debunks any claims by the banks and financial advisers that cutting consumer protections will reduce the cost of advice. The reality is that cutting consumer protections just increases commissions and fees paid to financial planners to sell bank products.”

Taking all commissions into account, the Rice Warner report shows consumers could face extra costs of up to $531 million a year.

“It would seem the banks’ objective is to be able to sell compulsory super and other products through financial advisers and other staff, rather than provide Australians with the impartial financial advice they want, need and deserve,” Mr Whiteley said.

“It is simply extraordinary the banks are seeking a leg-up of this size at the direct expense of Australian consumers.”