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AIOFP defends its commissions stance

Mike Taylor21 February 2024
Quality of Advice Review, GBST advice technology

Product manufacturers should be made to return value of unpaid trailing and grandfathered commissions to consumers via a lower Australian Securities and Investments Commission levy, according to the Association of Independently Owned Financial Professionals (AIOFP).

AIOFP executive director, Peter Johnston has taken issue with suggestions that his organisation is advocating the return of trailing commissions and says that, rather, the AIOFP is “suspicious of product manufacturers not returning” the total value of unpaid commissions to consumers.

In a message to members Johnston has referenced the option of getting grandfathered commissions that are retained by product manufacturers “back to ASIC’s coffers to offset the adviser levy”.

He claimed that if that occurred, it would ultimately be returned back to consumers via lower advice costs.

“The other place it can be used is funding the Compensation Scheme of Last Resort (CSLR), considering the manufacturers product failures are responsible for billions of losses, it seems also a very appropriate place to receive the funds,” Johnston said.

“Where would you rather your past revenue be held? With the Institutions or with ASIC to offset costs that will benefit consumers and your practice?”

“We also think the Risk Advice industry will not recover until the commission structure is returned to the pre LIF structure. The zealots who think risk commission should be banned do not understand human behaviour, the global experience and what has happened to the industry since LIF inception.”

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Pivved Off
1 month ago

How about back to the Advisors where breach of contract has been done!!!

Yeh na
1 month ago

Yeh nice try, but given no one in Canberra supports Real Advisers, who’s going make this happen ?
I’m sure the Institutions will just hand over the pocketed grandfathered Comms to ASIC. .

What’s Grandfathered?
1 month ago

Jam to ASIC for nothing? Really Peter!!
Mate your tongue is getting more brown by the day!!!

1 month ago

The saving to consumers was supposed to have been passed back to clients, personally I don’t believe it has but the key should be checking this rather than trying to unwind what has already happened. Consumers don’t understand how commissions work and whilst I personally don’t see anything wrong with them (subject to some protections for the consumer) its also time to accept that the battle is lost. What needs to be confirmed is that the consumer got the benefit and not the product provider