Fix conflicted remuneration or face grim future
The Government needs to move further on conflicted remuneration because, right now, there are too many noses with vested interests in the Australian financial services industry trough, according to Chan and Naylor Wealth Planning partner, David Hasib.
Hasib is arguing that the issue of conflicted remuneration has still not been satisfactorily addressed and, until it is, advisers risk being put back in the firing line.
He claimed it was in these circumstances that the financial services industry needed to initiate consultation to fix the broken regulation "before long-term harm is done to both the financial advisory industry and consumers".
"Currently we are shooting ourselves in the foot by completely disregarding the original intent of the [Future of Financial Advice (FOFA)] reform," Hasib said.
Referencing amendments which had been negotiated by the Palmer United Party as part of a deal to support the Government's regulatory changes to FOFA, Hasib said they had barely scratched the surface and did not deal with "the underlying issue of how this industry has been behaving over the last 20 to 30 years".
"This is driven by remuneration and right now there are simply are too many noses, with vested interests, in Australia's financial services industry trough," he said.
Hasib claimed the issue of conflicted remuneration had not been satisfactorily addressed and this would put advisors back in the firing line.
"…the entire industry, including dealer groups and product manufacturers, must be held more accountable, particularly as between 80 per cent to 85 per cent of financial planners have some form of institutional ownership (via their licensee)," he said.
"Before any further changes are made to FOFA, the Palmer United Party and the Federal Government would benefit from consulting with the broader financial services industry to gain a deeper understanding of the long standing issues," Hasib said. "If we can remove the inherent, product selling culture of the 80's and 90's, then it will be to the benefit of all Australians."
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