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AXA has warned the Cooper Review into superannuation against recommending a prescriptive approach to adviser remuneration.
In its submission to the second phase of the Cooper inquiry, AXA said it did not support regulating the level of adviser remuneration or the manner in which it is calculated and paid.
“Different members choose different levels of advice and also choose to pay for their advice by different means, and prescribing the means by which advisers are remunerated can prevent some members from receiving advice,” the submission said.
It warned that removing the option to pay for advice from the superannuation account might mean that only affluent clients would be willing or able to pay for advice.
The submission said that AXA’s view was consistent with the view expressed by the Department of Treasury in its submission to the Parliamentary Joint Committee into Financial Products and Services in Australia, which warned that the requirement for a fee only structure could contract the advice market and that such a contraction might largely fall on less affluent clients who were unable to pay upfront fees.
The AXA submission said the company believed that where an adviser provided advice to a member, the means by which the member and adviser agreed to pay for those services should be a matter for them.
“Market forces should be relied on to place competitive pressure on the level of fees,” it said.
