The Federal Government says moving away from commission-based fee structures will have long-term benefits for consumers and the financial advice industry.

Parliamentary Secretary to the Treasurer Chris Pearce has told the Investment and Financial Services Association (IFSA) that consumers need to feel they are getting value for money. Many are turned off by fee structures that have the potential to prejudice the advice received.

Mr Pearce’s address to IFSA touched on several issues, including the federal Budget and its effects on superannuation and investment.

But it was his take on remuneration issues that signalled a new line for the Government.

“Increasingly, your clients are now directly matching the value of the advice you give them with how much they pay for it,” he said. “The Government encourages the move away from traditional sales commissions that are not related to the value of the advice.”

It encourages the move but won’t be compelling the industry to act. “It is not for the Government to dictate to the funds management industry how it is to be paid.”

Mr Pearce says financial planners will also benefit from investment-savvy consumers who are educating themselves about financial markets.

“In the long term, planners will achieve a net gain in new business as confidence in the market grows and the education of investors continues to improve.”