Push to review remuneration practices

The chief executive of the Financial Planning Association (FPA) has flagged that it’s time to review the issue of remuneration in the financial services industry.

Speaking at Money Management’s State of the Industry breakfast in Sydney this morning, Bloch said “it is time to dust out that [remuneration] policy and look at it and determine whether the policy which supports commission and fees is still appropriate”.

“Members have had enough of being bandied around on the issue of commission,” Bloch said.

It’s now time to “set the record straight and look at what an appropriate remuneration model is”.

Bloch said a paper for consultation on the issue would be released soon.

The FPA chief said there is a need for Australians to receive quality advice, but the high cost of advice is an impediment, while the regulation around advice is “extraordinarily comprehensive and has perhaps gone too far”.

Bloch said the FPA also backed Sherry’s review of the super system, announced yesterday.

“We should be working out how to come out of this [current environment] together, which is why we signed up to the communiqué yesterday,” Bloch said.

She added that if the industry is going to make changes, "we need to be mature" and look at superannuation in particular.

Bloch said “there isn't a country [that’s] not looking at regulation, specifically financial advice and financial planning regulation”.

“Change is definitely on the way. The dilemma is how we manage the change and how we come out of this more robust, stronger than before,” Bloch said.