Financial advisers should be required to specifically declare whether they are independent or aligned with a major financial institution while the commissions grandfathering within the Future of Financial Advice (FOFA) regime should be terminated, according to consumer group, Choice.
In a submission to the Senate Economics Committee inquiry into Consumer Protection in the Banking, Insurance and Financial Sector, Choice is arguing that consumers have been getting a poor deal from the financial services industry and recommended specific changes to the financial planning settings.
Amid an array of other recommendations covering other sectors of the industry, Choice urged removal of the remaining commissions grandfathered by the FOFA regime.
It said it wanted the Federal Government to legislate to require that advisers “prominently disclose whether they are truly independent or aligned with a financial organisation”; adding that the exact terms of such disclosure should be based on consumer testing.
The submission then goes on to urge a phase-out period for the commissions which were grandfathered under FOFA and the removal of the current exemptions from conflicted remuneration contained in the Corporations Act and “the ban on asset-based fees received by advisers”.