Industry funds vow to denounce commissions

Commenting on the passing of the FOFA amendments, ISA chief executive David Whiteley reiterated the lobby group’s longstanding mantra that the “wind-back” of the laws will bring sales back to financial advice.

“Industry super funds will continue to refuse to pay sales incentives to financial advisers,” Mr Whiteley said.

“Consumers want impartial advice not sales. The wind-back of the FOFA laws brings sales back to financial advice,” he said.

Mr Whiteley said that as a result of the changes, the best interest obligations in the original laws will be gutted, erasing any requirement by financial advisers to act in their client’s best interests.

Mr Whiteley also said the changes will allow fees to be deducted from clients' savings, even when no service is being provided.

“The changes will re-allow the payment of a range of shadow commissions and sales incentives by banks and their wealth management subsidiaries to financial advisers and frontline staff,” he said.

“The wind-back of the FOFA laws contains a lot of fine print. The blunt reality is that confidence in the advice industry will continue to sink because financial advisers and bank staff will continue to receive sales incentives to recommend specific products.

“Sadly, these changes will only further reduce the reputation of the financial advice industry, which is already in tatters,” Mr Whiteley said.