Laws to shine a light on fees and independence 

Super Consumers Australia welcomes financial sector reform laws passed by Parliament yesterday, which will shine a light on advice fees and independence. 

Introduced by the Federal Government in response to recommendations of the Banking Royal Commission, advisers must now get consent from consumers annually if they want to continue to provide services and charge fees. 

“These laws will put a stop to the scourge of fees for no service. Companies charging these fees were responsible for ripping hundreds of millions of dollars from the retirement savings of Australians,” says Xavier O’Halloran, Director of Super Consumers Australia.

The reforms will also require financial advisers to disclose if they are independent or not.

“While we support the reform, Commissioner Hayne was unconvinced that these measures alone would cure the conflicts plaguing financial advice.”

“Disclosure of a conflict acknowledges the problem, but consumers would be better protected by removing the conflict altogether.”

“This is why we strongly support the Hayne recommendation to review existing conflicts in financial advice by 2022. This review has to deal with the long standing conflicts in the financial advice sector, including asset-based fees,” says O’Halloran.