The Association of Financial Advisers has submitted an expression of interest to ASIC to become a code monitoring body for the industry.
The AFA has submitted an expression of interest to the commission to become a code monitoring body before the new rules kick in in 2020.
Code monitoring bodies will not advocate for the value of financial advice and will not provide professional development or the networking opportunities currently in place.
All financial advisers will need to belong to a code monitoring body by January 2020, with membership being a legislative requirement and not a replacement of a professional association membership.
The AFA also released its response to the interim report of the royal commission and acknowledged that there were examples of some advisers not meeting their requirements.
AFA chief executive Philip Kewin said that while the interim report had not made any recommendations it was clear that financial advice would be at the forefront of the final recommendations next year.
Mr Kewin reinstated the AFAs support for life insurance commissions stating that reduction of the caps for life insurance or total removal of commissions would be detrimental to individuals.
“As none of the hearings highlighted any systemic issues created by the availability of Life Insurance commissions, we are not sure why they have again come under the microscope, particularly given the recent introduction of the Life Insurance Framework,” he said.
Mr Kewin hoped that the LIF reforms would be given a chance to work and that no further action would be taken until 2021 when the results of the reform could be seen.
Mr Kewin also argued against the demands for the removal of grandfathered commissions stating that there were no case studies to support its removal.
“We have continued to argue against this proposal on the grounds that there have been no case studies identifying grandfathered commissions as a cause of poor advice and a lack of research on the nature and extent of the grandfathered commissions issue,” he said.
Mr Kewin said that the AFA would work for its members and stand up against the royal commission on the issue.
“We have seen no evidence of anyone being willing to stand up and challenge what the royal commission have said on this issue or the recent announcements. We believe that we need to do this and have set out in our submissions a range of issues where we believe that clarification is required,” he said.
Mr Kewin said he looked forward to seeing other interim report responses and that there needed to be sensible debate in the lead up to the final report.
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