This was disastrous for many and led to unrecoverable losses, but the one positive was that it forced the Government to review the entire industry, in particular conflicted remuneration, and resulted in the ‘Future of Financial Advice’ (FOFA) reforms.

A major part of the FOFA reforms was the banning of commissions and other forms of conflicted remuneration for new clients, and a new legal obligation for financial advisers to put their clients’ best interests before their own. Hewison Private Wealth has long been critical of financial product commissions and volume based remuneration, so in our view these proposed reforms – although in some parts not going far enough – were long overdue.

However, last week the Coalition Government announced that it plans to move forward with a number of amendments to the FOFA reforms. The amendments would allow commissions and other conflicted remuneration to be paid to those giving “general” advice on financial products. This means that many employees of financial institutions; for example bank tellers, will be able to collect commissions so long as they issue a general advice disclaimer. What a joke! These amendments add to the “grandfathering” concessions that allow advisers to continue to receive commission on investments that existed prior to the introduction of FOFA.

It seems that after all the debate and discussion surrounding FOFA that unfortunately, if the government gets its way, commissions are here to stay. In our view this is a massive step back for the Financial Planning profession.

I hate jumping to conclusions, but it seems the major financial institutions – that also happen control almost 80% of the industry – have lobbied the government and have been granted their wish. This will enable them to continue pushing their own products through their distribution channels onto consumers. Does this really put the interest of the client first? I think not.

It is for these reasons that Hewison Private Wealth will continue to remain independent and give clients the confidence that the financial advice they receive is in their best interests only and in no way influenced by remuneration paid by third parties.