Strategy First recommends two-tiered service provision model

The financial advice industry should be split into two separate professions — financial advisers and financial product advisers, according to Strategy First Financial Planning’s submission to the Parliamentary Joint Committee on Corporations and Financial Services.

A two-tiered service provision model would distinguish between independent service providers and advisers who are associated with financial products and companies, recommended Strategy First managing director David Price.

Meanwhile, despite more than 70 per cent of planners likely to resist reforms that ban third-party payments, Price believes it is the only solution to ensure the financial planning sector remains viable.

“Only a complete overhaul of the industry that involves banning commissions and creating a profession with distinct service providers will save the financial planning industry from the growing distrust and discontent with which it is viewed by the Australian community,” Price said.