CHOICE calls for ban on asset-based fees
Consumer advocate group CHOICE has called for more stringency around financial advice conflicts of interest, such as asset-based fees, stressing regulation is the gateway to restoring trust in the profession.
In a submission to the Financial System Inquiry, CHOICE pointed to recent financial advice scandals as evidence financial advisers are "too often" putting personal gain before the client's best interests.
Despite regulatory efforts to remove conflicts, like the Future of Financial Advice (FOFA) reforms, CHOICE said asset-based fees are still common practice and should be targeted by regulators.
"Asset-based fees have many of the same market distorting features created by commissions, which have been recognised as inappropriate for advisers and largely, although not entirely, excised from the industry," it said in its submission.
The website also called for a ban on sales-based fees, which it said would "reinvigorate a sales-driven culture" and promote mis-selling.
"CHOICE believes that financial advisers should be banned from accepting any commissions, trails and asset-based fees due to the influence these forms of payment have on the quality of advice."
Among its other recommendations, CHOICE asked the inquiry to examine a clearer delineation between institutional and independent advisers.
AUTHOR
Staff Writer
Recommended for you
A former AMP adviser told the Federal Court how they are scared to turn off their phone after a fellow adviser attempted suicide as Justice McElwaine said the 92 objections “weighed heavily” on his mind.
Providence Wealth Advisory Group has appointed a new chief investment officer, a dedicated position after the role was previously held by its CEO.
While hiring new staff in a financial advice practice inevitably incurs expenses, Striver’s Alisdair Barr says the greater business cost can come from losing the skills of a valuable team member.
Sequoia Financial Group has announced it is selling off its Informed Investor subsidiary which it acquired in April 2022.
