Advice industry needs to prove it is not conflicted: ALP
The financial advice industry has a huge challenge in needing to prove it can provide a service to customers that is not conflicted, according to Shadow Assistant Treasurer and Shadow Minister for Financial Services, Stephen Jones.
Speaking at the Association of Financial Advisers (AFA) virtual conference, Jones said his party had a bias against the regulator’s review of the life insurance sector.
“I think the burden lies upon the industry at large to prove a conviction-based sales model attached to an advising sector that is able to provide a service to customers that is not conflicted and I think that is an enormous challenges,” he said.
“I think the Royal Commission made some pretty pointed findings in that area. I think it’s an enormous burden to get over. I’m always open to having an open dialogue with industry but I also don’t want to leave anyone in any doubt where they come into that conversation and what my views are.”
He said the old commission-based sales model which “facilitated the provision of product advice” was “gone and not coming back”.
“We need to ensure the new financial model not only provides services to high end users who frankly can afford advice and services, but my deep concern it’s the middle-income earners. We want to make sure they have access to financial advice. Australians have never had more retirement savings than they have today but the irony is it has never been harder to access advice,” he said.
Jones noted that he had had a “very good discussion with mortgage brokers sector and we looked a remuneration there but these things are never done and dusted forever”.
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