TheAssociation of Financial Advisers(AFA) has reacted to industry criticism of the findings of the Joint Parliamentary Committee on Corporations and Financial Services on commission disclosure on risk products.
The AFA was particularly critical of theFinancial Planning Association(FPA) and the Australian Consumers’ Association (ACA) stance.
The committee recommended to the Federal Government earlier this month that commissions on risk products should not be disclosed, a decision followed by much of the industry branding it a “disgrace.”
However, AFA president Robin Yates says that the recommendation deserves more consideration than associations like the FPA and ACA have given it.
Yates refers specifically to recommendation four in particular, on the issue of “market failure” in the provision of risk advice especially in regional areas.
“It would be far more constructive for these organisations to recognise that the committee has heard a great deal of evidence and has also examined the situation on this type of disclosure in the United Kingdom before coming to their conclusions,” Yates says.
“Let’s have more debate than the trotting out of years-old hackneyed arguments. After all, the regulators in the United Kingdom actually had the courage to change their view,” he says.
The AFA says recommendation four, asking how the Financial Services Reform Act will effect the delivery of risk insurances and services in both metropolitan and regional Australia, cannot be labelled as a disgrace.
After the release of the recommendation, the ACA urged the Government after the recommendation to reject for the third time the Committee’s call for an exemption, while the FPA also vetoed the findings and argued a commitment to disclosure of commissions is imperative.
