Consumers who currently pay for recurring financial advice within the bundled cost of a product and who don't receive ongoing advice may feel their adviser is a leech on their savings, according to actuary Andrew McKee.
"It is likely some consumers in bundled products, which include the cost of advice in the product, will be paying for advice without receiving ongoing advice," he told delegates at the Institute of Actuaries financial services forum in Sydney yesterday.
"They may understandably feel financial advisers are an unnecessary additional burden on their savings, and most importantly, a burden they haven't actively chosen."
Due to the complexity of Australia's financial services system, McKee said the difference between a consumer making an informed decision, a poor decision or no decision at all could cost the individual many thousands of dollars.
"Good advisers will still be able to generate tangible benefits for consumers due to the significant choice and complexity of the Australian financial services market as there is no one size fits all answer to people's affairs," he said.
McKee added there will no longer be a need to "compare the pair" once the financial planning industry transitions to a commission-free environment by 2012.
"Commissions versus fees is no longer a debate, it is just a matter of transition," he said.
"While the transition will cause some pain, after 2012 there will be no need to compare the pair. People will either get value from their adviser, or they will stop paying them."
The government's ban on commissions would also provide further impetus for product manufacturers to produce financial products with unbundled fee arrangements, McKee said.
