Financial advice: commissions aren't the problemDate April 3,...

Financial advice: commissions aren't the problem
Date April 3, 2014 Richard Livingston

“That's the fundamental problem. The financial advice industry is built on a conflict of interest – of which commissions are but one example – that costs consumers a fortune.
If you use an adviser, the commission they get on a life policy may cost you, but the bigger problem is if they're stuffing you and your portfolio full of in-house products.
FOFA may ban some commissions, but who is going to stop the boss tapping the advisers on the shoulder and suggesting that product sales are a bit low this month? “

“While the media is banging on about bank tellers' commissions and the legal nuances of the "best interest" test, keep sight of the fact you've been failed no matter who wins this fight.
Banks and insurance companies will be free to use their advisers as distribution outlets for their funds, insurance and loan products. Industry super can use advisers as a tool to stop you switching elsewhere.
Collectively, we're all being taken for a ride while the big industry players steer the spotlight away from the central problem this industry faces, which is that selling and advising shouldn't go together.
The FOFA laws, no matter what form they take, won't protect you.
Nowhere does the phrase "buyer beware" carry more weight than in financial services. It really is down to you to look after your own interests, because the law won't.“

Read more: http://www.theage.com.au/money/investing/financial-advice-commissions-arent-the-problem-20140403-360wp.html#ixzz2y3VIUo54