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Gov urged to reject sales commission push
The Federal Government should reject moves to reintroduce sales commissions for financial advices and compulsory super, Industry Super Australia chief executive David Whiteley believes.
Whiteley said a report by Rice Warner showed that the proposed amendments to the Future of Financial Advice laws — which are set to be discussed at a Senate Economics Committee hearing today — would see consumers hit with up to $7.5 billion worth of fees and charges over the next 14 years.
Responding to the findings of the report — commissioned by ISA - Whiteley reiterated claims he made earlier this week that the changes would cut consumer protection, and urged the Federal Government to reject the lobbying of the major banks for the return of sale commissions.
"The report debunks any claims the banks and financial planners that cutting consumer protections will reduce the cost of advice," he said.
"The reality is that cutting consumer protections just increases commissions and fees paid to financial planners to sell bank products."
"It would seem that the banks' objective is to be able to sell compulsory super and other products through financial planners and other staff, rather than provide Australians with the impartial financial advice that they want, need and deserve."
"It is simply extraordinary that the banks are seeking a leg up of this size at the direct expense of Australian consumers."
The ISA's report will be presented at today's Senate Economics' Committee hearing into the FoFA streamlining Bill in Canberra.
AUTHOR
Nicholas O'Donoghue
Nicholas is a journalist for Money Management and Super Review. Nicholas has several years experience as a journalist, reporting and managing websites for various news publications covering the medical and pharmaceuticals sector.
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Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
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