Assistant treasurer Arthur Sinodinos has listed insurance remuneration for financial advisers as a top priority, voicing strong opposition to a ban on risk commissions.
In a speech to the Association of Financial Advisers (AFA) conference on the Gold Coast yesterday, Senator Sinodinos spoke directly to a number of policy issues affecting advisers for the first time since his post-election appointment.
“There is a lot of anticipation and speculation within the industry and the media about how the Coalition government will deal with FOFA – we have very clear election commitments on this issue,” Mr Sinodinos said.
While the government supports the underlying original motives of Future of Financial Advice (FOFA) and the Ripoll inquiry to “improve the trust and confidence of Australian retail investors”, the assistant treasurer said the ultimate reform package has concerning elements and “imposes a significant regulatory burden on industry”.
Mr Sinodinos specifically singled out “insurance remuneration” as one of the "top of agenda" issues within his ministerial portfolio.
“The differing insurance arrangements inside and outside superannuation create confusion,” he said. “The Ripoll inquiry did not recommend the banning of commissions for risk products; recent experience in the UK indicates that banning commissions on risk insurance just doesn’t work,” he added to substantial applause.
“Such bans increase costs for consumers, limit their choices and leave many worse off.”
In addition, Mr Sinodinos reiterated the Coalition’s pledge to remove the opt-in requirement as well as provide timely guidance on grandfathering and remuneration of corporate superannuation advisers.
More broadly, the minister said the government is supportive of the financial advice industry and wants to see it prosper – in contrast to the “shellacking” advisers received from the previous government.
“My aspiration for the industry is that it would be world’s best practice,” he said.
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