Days after a super funds body called for brokers, as well as financial planners, to be banned from receiving insurance commissions, the federal government has stressed its FoFA changes are to benefit the customer – not to disadvantage any particular sector.
When the Industry Super Network suggested insurance commissions fall under FoFA’s conflicting remunerations ban, it was met with uproar from insurance brokers, who criticised the body for paying too much attention to payment and not enough to client need.
In a bid to alleviate fears and explain the reasoning behind the regulation, a spokesperson for Minister Bill Shorten’s office told Insurance Business that the reforms – which allow accountants to receive referral fees as long as it does not conflict with their advice – aimed to improve customer trust in the finance sector and remove structural impediments to broaden provision of advice by accountants and financial planners.
“The new limited licence is an important part of these reforms and delivers on the government’s commitment to expand access to financial advice and to increase consumer protection,” the spokesperson explained. “The new limited licence will enable accountants and other finance professional to provide broader and more strategic financial advice, including comparing the pros and cons of different classes of financial product.”