Industry funds step up commissions fight

The industry funds movement has drawn another line in the sand about commissions and fiduciary obligations for financial planners, arguing that a continuation of commissions or kick-backs would make a fiduciary obligation meaningless.

Industry Super Network spokesperson David Whitely said that it was in these circumstances that the Government needed to play a strong leadership role in addressing conflicted remuneration.

He said the Ripoll Inquiry had been very clear that the conflict created by existing remuneration arrangements would need to cease with a fiduciary obligation.

“However, the response from some parts of the industry clearly suggests they wish to retain commissions and other forms of conflicted remuneration,” Whiteley claimed.

He said that in light of this apparent confusion, the industry funds believed it would be necessary for the Government to spell out in legislation that remuneration must be consistent with fiduciary obligation.

“The introduction of a fiduciary obligation prohibits all forms of financial planner remuneration that create a conflict of interest,” Whiteley said. “To avoid a conflict of interest, individual advisers or licensees cannot receive any payments from product providers or fund managers.”