The Financial Planning Association (FPA) has called on the Federal Government to create a “level playing field” for commissions paid on insurance sold through superannuation.

FPA CEO Mark Rantall is questioning why different rules would apply to the treatment of commissions paid by life and general insurance companies.

This anomaly in the Future of Financial Advice (FOFA) reforms was pointed out to Treasury by insuranceNEWS.com.au several weeks ago, and officials have since confirmed there will be a two-tier commission system for insurance sold through superannuation.

“Such awkward policy inconsistencies create a potentially damaging double standard that will ultimately impact the quality and cost of [life] insurance for all Australians,” Mr Rantall said.

“The FPA is disappointed by an emerging uneven playing field created by the FOFA reforms.”

Mr Rantall says the discrepancy would be particularly obvious when a self-managed superannuation fund trustee pays a fee for advice on life insurance and nothing when buying a general insurance product, as that advice would be covered by a commission.

“As the peak professional body representing financial planners in Australia, the FPA supports conflict-free remuneration and promoting new professional standards,” he said.

“However, it is important there is a level playing field for all providers of advice.”