The financial advice industry may be forced into self regulation as a result of significant changes that could arise out of the Ripoll parliamentary inquiry, MLC chief executive Steve Tucker has said.
“We think shelf space fees will go, we think licensee standards will lift and volume rebates will go and we think the industry will be forced into self regulation,” he told delegates at MLC’s Professional Advice Congress in Cairns yesterday.
“So there’s some good news in the inquiry and that is that more people will absolutely end up having trust in the advice process, but it’s going to take some time.”
In order to foster change, Tucker said the role of licensees should be beefed up.
“Licensees should take the responsibility as to what products are available to clients, the process of dealer standards should be made public, we should stand for the advice that we give and we should be proud of it.”
Tucker said the financial services industry was in the midst of a consumer revolution.
He also highlighted an issue that surrounded the move of industry superannuation funds into the financial planning space.
“They have an Achilles’ heel – they’re talking about getting rid of any commissions, shelf space fees, volume rebates and asset-based fees,” he said.
“Now most of them are moving into financial planning and that financial planning is subsidised by the members – so they’ve got a problem and we’re going to raise the issue quite strongly. If they’re going to be giving financial advice, how is it going to be paid for?”
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