The CEO of the AIOFP, Peter Johnston, responds to the recent article in Professional Planner about commissions for risk business

Hi, just in case you have not seen the below article, allow me to respond, there is some nasty opportunism to ‘create a story’ involved.

We are not advocating the return of trailing commission but we are suspicious of the product manufacturers NOT returning it all to consumers.

What was not discussed in the article is the option of trying to get the grandfathered commission that was NOT returned to the consumer and retained by the product manufacturers, back to ASIC’s coffers to offset the Adviser Levy. That will ultimately be returned back to consumers via lower advice costs from Advisers to their clients. Yes, a hard road to get that done BUT it will shine a light on what we believe has been retained by the manufacturers and not passed on.

The other place it can be used is funding the CSLR, considering the manufacturers product failures are responsible for billions of losses, it seems also a very appropriate place to receive the funds.

Where would you rather your past revenue be held? With the Institutions or with ASIC to offset costs that will benefit consumers and your practice?

We also think the Risk Advice industry will not recover until the commission structure is returned to the pre LIF structure. The zealots who think risk commission should be banned do not understand human behaviour, the global experience and what has happened to the industry since LIF inception.

Regarding the comment about educational standards and our legislative success with the Education Pathway 10-year rule, we thought circa 30 suicides was enough from our sector and the older more experienced Adviser deserved to be recognised and rewarded for their past contribution to the industry. We make no apology for that outcome.

A cursory look at the Director qualifications on some Association boards suggests some are very thankful for this outcome, but we are happy to help them!

Read Professional Planner article here


Peter Johnston | Executive Director
Association of Independently Owned Financial Professionals
Suite 1211, 1 Queens Road, Melbourne VIC 3004
P 1800 111 203, d 03 9863 7574, m 0418 857 621 | Download my business card

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