A Canberra-based adviser and chairman of the Independent Advisers Association of Australia, Daniel Brammall has urged the Australian Securities and Investments Commission (ASIC) to review its policy on asset-based fees in the context of the negative view expressed by the Royal Commission.
In a statement responding to the Royal Commissions findings, Brammall said the IFAAA specifically pointed to Commissioner Kenneth Hayne’s views on asset-based fees as being the industry’s dominant remuneration model and his statement that the model “appears to have been an attempt to replicate the revenue stream that flowed from a combination of upfront and trail commissions”.
“The IFAAA urges the ASIC to now heed the comments by Commissioner Hayne that relate to asset fees and declare them to be a conflict of interest,” Brammall said.
Elsewhere in the IFAAA’s response to the Royal Commission, Brammall said the organisation applauded the recommendations made with respect to financial advice, particularly the need disclosure lack of independence to a potential client in advance.
“The IFAAA welcomes Commissioner Hayne’s recommendations,” he said. “They echo the IFAAA’s Gold Standard of Independence: no commissions, no asset fees, no links to product manufacturers. Without this Gold Standard, as a consumer you run the risk of not getting true advice, but rather a sales pitch masquerading as advice.”