Some commissions may survive under APES 230
The Accounting Professional and Ethical Standards Board (APESB) has indicated the APES 230 standards will not force planners to move clients out of insurance contracts that pay commissions.
BT senior manager for technical consulting Bryan Ashenden attended the board meeting, which was held in Melbourne and open to the public.
"Essentially what they indicated was that this change with the ban on insurance commission doesn't necessarily mean that planners will need to move [their clients] out of their existing insurance contracts," Ashenden said.
The board members said that if it was in a client's best interest to be in a particular insurance contract then they should stay in it, he said.
The APESB indicated that it would be acceptable to receive a commission from an insurance product - as long as it is offset against a service fee that has previously been agreed to by the client, said Ashenden.
"If the client's in the right product and they agree with you that you can offset [the commission against a service fee] you don't have to rebate it back to them. But if they don't agree, then yes you have to give it back to the client," said Ashenden.
The APESB is on track to release a draft of the APES 230 ethical standards before Christmas, added Ashenden.
"They said they're not going to consult any further. They'll update and make some wording changes where required," he said.
The Financial Planning Association has expressed concerns that the majority of the submissions to the APESB on the APES 230 standards have been critical of the proposed changes.
"The bit that the [APESB] was at pains to point out was that [it exists] to act in the public interest. Whilst they're independently funded by the accounting bodies, they aren't there to work for the accounting bodies," said Ashenden.
"The APESB board is independent from the three accounting bodies. No one is a member of the APESB itself," he added.
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