The review – undertaken between February and April 2013 following the January start date of the reforms, which banned product commissions and created a formal definition of ‘independent’ advice – found that “the majority of firms have made progress and there was a willingness to the new rules”.
However, it also found a number of issues requiring further attention, including some firms “describing themselves as independent but in fact choosing products from a limited number of providers or products”.
This finding comes despite a binary distinction between “independent” and “restricted” advice stipulated in the RDR reforms.
The review also found some advice firms have been guilty of “not clearly explaining what service customers will receive for on-going fees”.
However, FCA director of supervision Clive Adamson said the review had to be viewed in context and that these issues may have been further resolved by this stage.
“The research for this report was undertaken just a few months after the implementation of RDR, so provides an early snapshot of what has changed,” Mr Adamson said.
“This early view shows that, while firms have acted, they still have more to do if a customer is going to be in the best possible position to understand the charges they will pay and the service they will receive.”
Wel’l all be so busy explaining and disclosing what we can and cannot do, we won’t have the time or focus to provide quality advice. But as long as we are compliant with the rules, that’s all that matters. And that is why only the big corporates will survive in Australia.
One of my clients got a call and a follow up email from a certain bank adviser. He showed me a copy. The adviser said he does not receive a commission but gets paid a salary so his advice is unbiased. Then I ask…why was the bank looking at my clients bank statements for insurance premiums and phoning client to say they can offer a cheaper policy without knowing the policy he was in or the clients situation. If one has to justify their salary by meeting targets, then you can’t tell me that is in the best interest of a client and commission is not.