Ensuring planning licensees get paid the same for recommending an unlisted managed fund or a listed security would result in a better deal for consumers by forcing greater price competition between the products, according to Puzzle Financial Advice director Bruce Baker.
“The conflicts of interest of the planning licensees are a far more powerful source of tainted advice than the conflicts of interest of individual financial planners,” Baker said in a submission to the Parliamentary Joint Committee on Corporations and Financial Services’ current Inquiry into Financial Products and Services in Australia.
His submission, ‘Reducing Costs of Advice and Funds Management for Consumers’, sought to “provide solutions to the problem” of high total fees on super guarantee contributions.
Baker added “breaking down the existing distribution channels for unlisted managed funds” would also help to “force much greater price competition between inexpensive listed securities and expensive listed securities, such as shares, [listed investment companies] and [exchange traded funds]”.
He called for a system for consumers to transact unlisted funds and super with the same simplicity and low cost as buying a share through E-trade or CommSec.
