The Financial Planning Association (FPA) has effectively distanced advisers from the current debate around stamping fee exemptions for Listed Investments Company (LIC’s) and Listed Investment Trusts (LIT’s) as part of its response to a consultation initiated by the Treasurer, Josh Frydenberg.
While welcoming the consultative process, the FPA chief executive, Dante De Gori made clear that advisers were not part of the remuneration equation flowing from the LIC and LIT regimes.
Referencing the FPA’s 2009 launch of the FPA Code of Professional Practice and the FPA Remuneration Policy, De Gori noted the best interests requirement and the principle of client-directed payments that had been reflected in the terms of the Future of Financial Advice (FoFA) reforms.
“At this point in Australia, all other forms of product directed payments that a financial adviser receives from clients, have been banned, leaving most financial planners only receiving fee for service payments,” De Gori said.
“Between 2009 and 2012, all of our members transitioned away from these payments to ensure that clients are receiving unconflicted advice. As a result, FPA members currently receive on average around 8% of their total revenue from investment commissions, with the majority of this being phased out by 1 January 2021 when grandfathered commissions will cease,” he said.
“The FPA supports the government’s efforts to improve the quality of financial advice that all Australians receive. Ensuring that people receive unconflicted advice, that is in their best interests, is vital to the provision of financial advice that Australians can trust and rely on.”