The Australian Securities and Investments Commission (ASIC) signaled commission-based advice could soon face further regulation in a statement released last Friday praising the efforts of several institutions to introduce fee-for-service financial planning.

Jeremy Cooper, ASIC deputy chair, said ANZ’s move to fee-based financial planning was laudable and slammed the “deficiencies” of the commission model. “A fee-for-advice model requires planners to explain and justify the value of their advice in a much clearer way. Consumers can then decide for themselves how much they think the advice is worth,” he said. Cooper, who declined to elaborate on his statement, did not indicate whether the fee-for-service model it favoured was an asset-based fee or an hourly-rate arrangement. Nick Sherry, Labor shadow minister for financial services, told I&T News that ASIC’s statement added to the ongoing pressure which would lead to the “inevitable” banning of trail commissions. While ASIC doesn’t have the power to ban trail commissions it does influence any government decisions in this area. A spokesperson for the Financial Planning Association (FPA) offered no comment on Cooper’s statement but pointed to the association’s conflicts of interest project. The Investment and Financial Services Association was unavailable for comment but it is producing its own conflicts of interest rules which are understood to differ from the FPA draft.

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