Financial Services and Superannuation Minister Bill Shorten has given the first indication the federal government may reconsider its ban on risk commissions inside of superannuation.
Speaking yesterday at the Financial Services Council (FSC) conference on the Gold Coast, Shorten said he had become more “persuaded” by the argument against the proposed commissions ban in certain cases.
“I have to say that I have been listening very carefully and whilst this isn’t a definitive statement, I am a little more persuaded with the case around risk insurance and commission where there’s a bit of work gone into actually delivering a product to an individual,” he said.
“I don’t see the case for commission on insurance through default or group policies, but I’m certainly being open and listening carefully to propositions put around individually-advised risk products in super.”
He said two Labor MPs – Bernie Ripoll and Deborah O’Neill – had been “influential” in stating the case against the risk ban.
Commenting further on the matter, he said: “I can’t see any case or any set of circumstances for commission on products which haven’t had any work put into the advice.
“They [Ripoll and O’Neill] put some views to me in favour of leaving commissions on individually-advised products.”
While the government was undecided on its risk commission ban, he said it intended to push ahead with its opt-in reform.
“The government is committed to opt-in. We will take our chances in parliament. We think the idea that people should at least seek a renewed mandate from clients is not onerous,” he said.
“I’ve seen some numbers that have said it would cost $100 every time this transaction takes place – I don’t believe that. [Opt-in] is really the bare minimum, frankly. It’s a pragmatic compromise.”
The coalition responded to Shorten’s comments yesterday, saying it would welcome a reversal on risk commissions.
“It was bad policy which was not thought through properly before he announced it and clearly did not withstand scrutiny,” Shadow Financial Services Minister Mathias Cormann said in a statement.
“It would have reduced consumer choice for no consumer-protection benefit at all.”
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