The Association of Financial Advisers (AFA) has continued to rail against the findings of the Royal Commission pointing out that it had failed to understand the degree to which intra-fund advice is conflicted.
The AFA’s general manger, policy and professionalism, Phil Anderson has written a paper in which he laments the degree to which the Commissioner, Kenneth Hayne, failed to recognise the value of advice while failing to understand the workings of intra-fund advice.
Anderson suggested that all advisers should be concerned about the way financial advice had been described and treated in the Royal Commission final report, even those who thought the Royal Commission represented a great opportunity to deliver fundamental change and help make financial advice a genuine profession.
“There can be no doubt that what the Royal Commission has said about financial advice, both fair and unfair will have a long-term impact,” Anderson wrote.
“Industry Super Australia (ISA) asked for much in this process, including the removal of grandfathered commissions, life insurance commissions, non-monetary benefits, and ongoing fees from superannuation accounts (or otherwise move to annual renewal),” Anderson wrote.
“One thing that they called for to be retained was intra-fund advice, and that is exactly what they got (again),” he claimed.
“We are not arguing for the banning of intra-fund advice, however we do appreciate that it has the ultimate conflict of interest in that it can only involve a recommendation with respect to the fund that the adviser works for,” Anderson wrote
Further he pointed out that the Australian Securities and Investments Commission (ASIC) had acknowledged that it had not yet looked at industry fund advice adding, “so it is not surprising that there were no issues highlighted at this stage”.
“It is interesting to hear that following the finalisation of the Royal Commission, the industry fund movement is now pushing for a broader definition of intra-fund advice,” Anderson said.
“One further point to note on this statement, is that the Commissioner is wrong again, and intra-fund advice does include personal advice,” he wrote.
