Industry backs Shorten concession on risk in super

The financial planning industry organisation has welcomed a signal from the Assistant Treasurer and Minister for Financial Services, Bill Shorten, that the Federal Government is prepared to cede ground on the blanket banning of commissions on risk products sold within superannuation.

Shorten used an address to the Financial Services Council (FSC) annual conference on the Gold Coast to declare the Government was prepared to shift ground on the banning of commissions on individually advised risk products within superannuation.

In doing so, the minister acknowledged the lobbying efforts of the FSC and the Financial Planning Association (FPA), but specifically excluded the efforts of another planning industry organisation which was widely assumed to be the highly vociferous Association of Financial Advisers (AFA).

Notwithstanding the minister’s exclusive omission of his organisation, AFA chief executive Richard Klipin welcomed Shorten’s announcement, but said the next move by the Government needed to be a shift on its stance with respect to the two year “opt-in” provision.

However, Shorten made clear that while the Government was prepared to shift ground on individually advised risk commissions, it was totally committed to the two year opt-in, which he regarded as the minimum that could be expected of advisers.

He said that where commissions on individually advised risk products were concerned, the Government was prepared to concede some ground on the basis of submissions received from the industry, particularly the FPA and the FSC.

The minister’s statement was welcomed by the executive director of the FPA, Mark Rantall, who said he believed Shorten’s announcement was a direct result of lobbying by the FPA.

He said that while the FPA had not been overly vocal about its lobbying role, it had nonetheless been working closely with the Government to achieve a change in the position with respect to the banning of commissions on risk in superannuation.

The minister’s announcement has also been welcomed by the Coalition, with Federal Opposition financial services spokesman, Senator Mathias Cormann, saying it always represented a bad idea and something which had been adopted by the Government at the behest of the industry superannuation funds.