The Investment & Financial Services Association (IFSA) has welcomed the Ripoll inquiry’s recommendation for a fiduciary standard between financial planners and clients, but signalled it opposed the recommendation that payments from product makers to advisers cease.
The ceasing of remuneration to advisers from product makers is not needed should a fiduciary standard for planners be adopted following the inquiry, IFSA chief executive John Brogden said.
“A fiduciary duty is superior in all ways to any payments between product manufacturers and financial advisers,” Brogden said.
“If a fiduciary standard for financial advisers is adopted, we do not believe ceasing remuneration paid to financial advisers from product manufacturers is required.”
However, IFSA was ready to work with the government should it move to ban payments from product manufacturers to advisers such as commissions and volume bonuses, he said.
“However, if the government adopts this recommendation, we will work with them to ensure that the outcome is in the best interests of consumers,” Brogden said.
The Association of Financial Advisers (AFA) praised the fact the Ripoll inquiry did not outright ban commissions as it recognised the impact such a move would have on the average Australian’s access to financial advice.
“We are delighted that the inquiry has identified fiduciary responsibility as the main issue, rather than focus on the commissions or fee model,” AFA chief executive Richard Klipin said.
“The issue is the quality of advice and the price you pay for it.”
