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A transition from commission-based remuneration towards a fee-based system is fundamental to a more reputable industry and transparent customer service, according to the Financial Planning Association of Australia (FPA).
In a statement released yesterday, the FPA revealed that it had been inundated with questions and concerns off the back of its remuneration consultation paper released earlier this month, which recommended that financial planners move towards a fee-for-service remuneration model.
The FPA emphasised it was not suggesting a ban of commissions or recommending hourly rate fees as the only alternative to commissions, but proposed a transition period to allow the industry time to consider how best to construct more client-directed remuneration.
“The FPA wants to discuss and agree [to] an appropriate remuneration model that aligns service and remuneration; that puts the negotiation in the hands of the planner and the client; that enables greater clarity and transparency of fees and that will ultimately lead to a better understanding of the value of advice,” FPA CEO Jo-Anne Bloch said.
Ms Bloch said the FPA stood committed to engaging in further dialogue with industry members and product providers to discuss remuneration arrangements and remained open to negotiate a transition period for the changes.
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