A consultation paper released by the Financial Planning Association of Australia (FPA), Financial Planner Remuneration, has sparked heated debate within the industry over a proposal to eliminate product commissions paid to planners.
The paper proposes that from July 1, 2012, members of the FPA will not be permitted to receive commission payments directly from product manufacturers. The aim of the proposal is to sepaÃ‚Â¬rate in fact, as well as in perception, the direct link between financial planners and product manufacÃ‚Â¬turers.
The chief executive of the FPA, Jo-Anne Bloch, says the move is supported by the FPA’s members. However, she says the association expects and welcomes an open and robust debate during the consultation period.
Opponents have been vocal in objecting to the paper’s proposals, pointing out that they jeopardise attempts to address the chronic underinsurance issue in Australia, and that it is not the FPA’s role to dictate to its members how to structure their businesses.