Members who fail to comply with the FPA's proposal to move to a fee-for-service model by 2012 will not be expelled from the association, FPA chief executive Jo-Ann Bloch announced yesterday.

"Members of the FPA will not be expelled from the FPA for failing to comply with our proposals, if we can agree on a mutually beneficial transition period," Bloch said.

"We suggested 2012 but are open to negotiate with members on a suitable period, noting the difficult economic circumstances and the inherent issues associated with significant change such as that being suggested."

The FPA said clarification was needed on some misunderstandings and concerns that have arisen in the industry following the release of its Financial Planner Remuneration Consultation Paper three weeks ago.

"It's no surprise that the feedback has ranged from the highly constructive to the highly emotional," Bloch said.

Among these concerns is adviser remuneration and commissions.

"The FPA is not directing what financial planners should charge their clients. We are looking to common and agreed charging models where the client pays for the advice," Bloch said.

She said the FPA is not recommending hourly rate fees as the only alternative to commission-based remuneration.

"Asset-based fees and service-based fees agreed by and paid for by the client are also included as a client-directed payment mechanism, which means the FPA's proposal is not restricted to hourly or time cost fees only," Bloch said.

Since releasing its remuneration paper there has been much debate about what constitutes a commission, according to the FPA.

"A commission is a payment made by the product provider to the financial planner, through their licence, for recommending the product," Bloch said.

"The FPA is recommending a transition away from this to ensure transparency within the financial planning profession and consumer protection."