If life insurance commission are not banned within superannuation, advisers could exploit fund members to earn more income, according to an industry superannuation body.

Industry Super Network Strategy Manager Robbie Campo told a Senate committee hearing on the Future of Financial Advice that the body supports a ban on all commissions for insurance.

“We are moving into an environment where other sources of commission will be closed off,” she said.

“If the only remaining commissions that are available are life commissions, you need to be careful that those are not exploited to drive sales of superannuation products.”

Committee member and Opposition financial services spokesman Mathias Cormann asked Ms Campo why life commissions within super should be treated differently.

She said there were potential arbitrage issues if commissions were allowed for some sales and banned for others.

“Our position in respect of insurance commissions was for a ban in their entirety,” she said.

“But the Government has come to a compromise position. We think it is important that there is a distinction between personal advice on individual insurance as opposed to group cover, which is typically bundled with super.”