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The new Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, has acknowledged a problem with the perception of financial planners in the community when it comes to commissions-based financial advice.
Speaking on the 7:30 Report with Kerry O’Brien, Bowen said there is a constant issue in terms of a perceived conflict of interest when it comes to commissions-based advice.
“I believe there’s certainly potential for conflicts. And I believe that’s a very real perception problem, and it will be much better for the industry if a better way could be found,” Bowen said.
Bowen obliquely acknowledged the Financial Planning Association’s recommendation to move away from commissions-based advice, saying “certain industry peak bodies” are recognising that there is a perception problem with commissions advice.
Bowen said he would weigh up the recommendations of the Cooper Review considering commissions-based advice and would express privately and publicly his concerns to the industry.
Bowen also acknowledged that while the Henry Review was looking at whether Australians were too exposed to share market risk and whether there is a need for reform in the industry, “at the end of the day” it is an individual choice about weighing up risk versus returns on an investment.
