CHOICE calls for ban on asset-based fees

financial-advice/government-and-regulation/FOFA/commissions/

27 August 2014
| By Staff |
image
image
expand image

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.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks 1 day ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS