AFA response to RC recommendations
/The Association of Financial Advisers (AFA) has provided a written analysis of Royal Commission’s final report, citing a ‘number of errors’.
The author of the analysis, AFA general manager for policy and professionalism Phil Anderson, said that it appeared Commission Kenneth Hayne has a bias for further reducing commissions, unbalancing the outcome of the report.
Other observations by Anderson include:
Hayne clearly wishes to reduce commissions, but also said that the 2012 ASIC review should play out as per the government’s commitment.
The report references life insurance commissions receiving attention during hearings, however ‘there was only one prominent case that referred to life insurance advice’ regarding a couple who were advised to set up a self-managed superannuation fund and buy a bed and breakfast, making the life insurance advice incidental.
The final report incorrectly describes the Life Insurance Framework (LIF) model, specifically regarding that cap and clawback arrangements apply to level commissions, which they do not, as the LIF model runs on upfront commission arrangements only. This error also appeared in the interim report and was pointed out by the AFA at that time, amongst other reappearing errors.
