O’Dwyer cites life/risk commissions as FOFA oversight

The Minister for Revenue and Financial Services, Kelly O’Dwyer has pointed to the Government’s action on life/risk commissions in the context of the Australian Securities and Investments Commission’s (ASIC’s) most recent report on the supervision of advisers by the major banks.

In particular, O’Dwyer noted that commissions paid on the sale of life insurance products were originally left out of the Future of Financial Advice (FOFA) reforms and this was something which had been addressed by the Turnbull Government.

Commenting on the release of the ASIC report on advice supervision within the major banks and AMP, the minister said it showed that ASIC was taking proactive steps to monitor the financial advice sector’s compliance with the law, and to work with the sector to improve practices, to prevent future harm to consumers.

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She said the work had been complemented by the Turnbull Government’s recent reforms to raise the professional, education and ethical standards of all financial advisers, and to remove inappropriate incentive structures for the sale of life risk products to retail consumers.

The professional standards reforms would enhance the financial adviser register, introduced by the Government in 2015, so that consumers could readily access information about their financial adviser, including whether the adviser has been subject to disciplinary action by a relevant compliance monitoring body.   

“Commissions paid on the sale of life insurance products were originally left out of the FOFA reforms,” O’Dwyer said. “The Turnbull Government has acted to address the risk that commissions on the sale of life risk products will incentivise advisers to act in a way that is not in the best interests of their clients.”

The minister also noted that the Government had established the ASIC Enforcement Review Taskforce, which would consider and make recommendations to Government on ASIC’s powers and enforcement toolkit.

“We have also committed to putting in place a one-stop-shop for consumer complaints that will provide speedy and independent access to justice, have the power to make binding determinations and to provide compensation,” she said. “The Turnbull Government is taking action now to address the past issues that have occurred in the financial services industry and will continue to implement the most ambitious financial system reform agenda in modern history.”

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we are the only sales organization in the world that the government tells us how much we can earn and over what period, thus we are not in sales if it is regulated like this. Maybe the government ministers should repay all there wages or 60% of them if they fail to keep there election promises during there term in parliament, Turnbull and Odwyer you have to be kidding you are destroying the industry that is pumping 20 Billion dollars into the economy and you will pay the price at the next election. BTW you have given the big 4 the opportunity to sell off their Insurance business now at twice the real worth thanks to the Cartel FSC. Well Done

O'Dwyer needs to do some research, this only happened a few years back, and already she is re writing history with her words. Life comm was left out of FOFA, as this was a trade off for being forced to have Opt in, removal of commission for investments etc. Now the gutless associations didn't stand up and say hey we covered this off years ago, we offset this with Opt in and FDS and the removal of commissions from investments, no they lied down and said yes minister. Very dissapointing from an advisers point of view that they cant stand up and fight, you would not want most of them in the trenches with you they would be negotiating with the enemy all the time...

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