Govt digs in on commissions removal

The Federal Government has linked the removal of commissions paid to financial advisers to its agenda to make Australia a regional financial services hub.

The Minister for Financial Services, Chris Bowen, has told the Parliament that other nations will lack trust in the Australian financial planning industry if it does not hold the trust of Australians themselves.

“I would argue very simply that it would be impossible to ask those in other countries to place their trust and confidence in our financial planning industry if Australians do not,” he said.

Bowen said a similar point had been made by the Johnson Committee, which observed that the realisation of opportunities to attract overseas capital to Australia was "dependent on, amongst other things, the reputation and integrity of Australia’s financial advisory sector being maintained and, where necessary, improved”.

“To this end, their report argued that resolving conflicts of interest in the financial planning industry is ‘consistent with ensuring that the reputation of Australia’s financial sector, in particular funds management and financial planning, is maintained overseas, a prerequisite for greater international engagement’,” he said.

At the same time as linking the changes to Australia’s financial advice regime to the development of a regional financial services hub, Bowen claimed that the Federal Opposition had effectively abandoned its commitment to the objective.