ISN offers help to Govt on fine detail of FOFA
Commissions and financial inducements have been the only reason poorly performing superannuation funds have been able to get a foothold in the Australian market, according to Industry Super Network (ISN) chief executive, David Whiteley.
Commenting on the release of the second tranche of the Government's Future of Financial Advice (FOFA) legislation, Whiteley said the legislation, if enacted, would "bring an end to costly commissions on compulsory superannuation".
However the chief executive of the Financial Planning Association (FPA), Mark Rantall, pointed out that the FPA had introduced policy supporting the banning of commissions three years ago - well before the issue had been raised in the FOFA changes.
"We also support the banning of soft dollar benefits which further supports our existing joint venture with the Financial Services Council," Rantall said.
However he said the Government needed to clarify a number of issues contained in FOFA drafts including the last resort compensation scheme, the final report on the advisory panel on standards and ethics, the accountants exemption and the restrictions on the use of the term "financial planner".
The second tranche of the Government's FOFA legislation directly targeted conflicted remuneration and soft dollar arrangements and provided examples of relationships which would be regarded as conflicted.
However individual planner responses received by Money Management argued that the same rules on conflict should be extended to the operation of industry superannuation funds, particularly with respect to relationships with fund managers and overseas travel.
Whiteley said the ISN looked forward to working with the Government on the fine detail of the legislation to ensure it achieved all of its intended policy objectives.
AUTHOR
Mike Taylor
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