Labor acknowledges commissions ‘problem’

Federal Opposition Leader Kim Beazley has acknowledged that commissioned-based financial advice represents a problem for the superannuation industry.

Questioned on his views of the results of the Australian Securities and Investments Commission’s (ASIC) latest shadow shopping exercise, Beazley described the commissioned-based arrangements as problematic but stopped short of saying how a Labor Government would address the problem.

Instead, Beazley said the commissions issue was something that would be addressed within the totality of Labor’s financial services policy approach.

In contrast, the Association of Superannuation Funds of Australia (ASFA) last week called on the super and financial advice industries to accept the ASIC results as a challenge to find an appropriate structure of payment for financial advice that does not influence the advice provided.

ASFA chief executive Philippa Smith said that either the potential conflicts of interest in commission-based advice had to be better managed or an alternative system of payments found.

“At the outset, industry and consumers need to acknowledge and accept that the provision of good advice takes skill and time, and those who provide it need to be properly rewarded,” she said.