FPA formalises shift away from commissions
The Financial Planning Association has formalized its decision to move away from commissions-based remuneration.
FPA chief executive, Jo-Anne Bloch announced today that the decision had been backed by the FPA board after the receipt of around 250 submissions both for and against the move.
“Members on both sides of the debate have made substantive contributions that have enabled the FPA to finalise the policy and ensure efficient implementation of these principles,” Bloch said.
She made clear, however, that risk products were not within the ambit of the policy at this point in time, and neither were rebates and related payments, which were product directed payments to Australian Financial Services Licensees.
“However, it needs to be clearly stated that the FPA wants to encourage the entire Financial Services industry, product providers and financial planners alike, to progress towards a transparent and appropriately labelled environment where clients can benefit from professional and unbiased advice,” Bloch said.
She said the FPA had therefore established a member working group to progress appropriate remuneration principles for risk products, and a working group to determine how corporate superannuation will be implemented. Both will report to the FPA by early 2010.
Whilst many FPA members already have transitioned to client directed fee payments, the FPA has also established a transition committee to assist members with guidelines, tools and information to ensure a smooth transition for every practice.
“FPA members will be required to transition away from commission-based remuneration by 2012 but the FPA wants to encourage members to adopt these remuneration practices as soon as their business is ready,” Bloch said.
AUTHOR
Mike Taylor
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
