Bernie Ripoll (Oxley, Australian Labor Party) Share this | Hansard source

Absolutely, and I thank the member for his question. Recommendation 4 in the committee report is very clear. I will read it. It says:

The committee recommends that the government consult with and support industry…

I think that is really important.

… in developing the most appropriate mechanism by which to cease payments from product manufacturers to financial advisers.

What that clearly says is to stop payments, all payments, whatever form they take. People can decide for themselves. We did not limit ourselves to one type of payment but the committee decided unanimously that it was all the payments. That can be volume bonuses, shelf fees, soft dollar incentives and commissions right across the board. We felt there was inherent conflict of interest that existed with a person being paid to sell you something. Often it is not clear that you are actually being sold a product rather than being provided advice. That is the clear point.

You can separate the two. People can genuinely pay to receive advice, and that advice does not need to be attached to a product. You can receive advice and have a product as well, and as long as that is transparent and clear you can live in both worlds. But currently there is a problem. There is a big grey area where often people who advise actually do not know whether it is advice or whether it is a product, and all too often we have seen people get caught up in that problem.

I am very happy with the recommendations in this report. I want to thank the Liberal Party, National Party and Labor Party members of the committee for their great work. (Time expired)

Debate (on motion by Ms King) adjourned.

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