Financial advice conflicts must end
Consumer group CHOICE welcomes recommendations from the Australian Securities and Investments Commission (ASIC) for sweeping reforms for the financial advice industry.
Reforms include banning upfront and trail commissions and percentage-based fees paid to financial advisers.
“Consumers need to be sure that their financial advisers are working for their benefit and their benefit alone,” said CHOICE senior policy officer Elissa Freeman.
“These recommendations are the first steps towards removing the perverse incentives that lead financial advisers to push products on their clients.”
ASIC has made its wide-reaching recommendations to the Joint Parliamentary Committee on Corporations and Financial Services, which is currently investigating financial products and services in the wake of a string of corporate collapses, including Opes Prime and Storm Financial.
“A new regulatory regime should ensure clients’ needs come first and that financial advice really is impartial and unbiased. We’re pleased to see that’s exactly what ASIC is recommending,” said Ms Freeman.
CHOICE is campaigning against conflicts of interest in the financial advice industry and is calling for bans on commission, percentage-based fees and other kickbacks to advisers.