Industry bodies express support for IFSA commissions call

Industry bodies and representatives across the financial services industry have expressed support for the Investment and Financial Services Association’s (IFSA's) announcement that it will begin rolling back commission payments next year.

The Financial Planning Association (FPA) said in a statement it was pleased that the super industry will deliver products that allow financial planners to recommend them without commissions being a conflict of interest.

Peter Johnston, chief executive of the Association of Independently Owned Financial Planners, welcomed the move, saying that as soon as financial planners receive a commission from product manufacturers it creates a conflict of interest and advisers can in most circumstances not be working in the best interests of the clients.

MLC said the IFSA announcement coupled with the FPA's recent consultation paper would provide a united voice in the industry for addressing the perception that conflicts of interest plague the recommendations of financial advisers.

MLC provides fee-for-service financial advice through its MasterKey and MasterKey Custom platform.

Minister for Financial Services Chris Bowen congratulated IFSA for showing “good leadership” in deciding to move away from commissions and said it was important that the industry itself work through the issue. Bowen has previously said that he would legislate against commissions as a last resort.

Chris Pearce, the Shadow Minister for Financial Services, also said IFSA had shown good industry leadership in the announcement.

Maurice Blackburn Commercial Lawyers said government legislation would be needed to protect investors and ensure transparency beyond a code established by the industry, while Industry Funds Financial Planning expressed reservations about the charter.