Rudd government may 'water down' adviser fee reform

The federal government may water down rules relating to how often financial advisers have to get their clients’ agreement to charge them regular fees, it has been revealed.

Reforms proposed in April in response to Bernie Ripoll’s inquiry into the financial planning industry recommended that advisers be required to ask their clients every year whether they want to continue to be charged a regular payment for advice.

However, in an interview with the Australian, Financial Planning Association acting chief executive Deen Sanders said the government is now considering allowing new agreements between advisers and clients on financial advice to run for up to three years before the adviser would be required to check with the client about fees.

Mr Sanders said such a change of position was born out of industry concerns over the cost and inefficiency of having to contact each client every year, though the Australian Consumers Association said any weakening of the government’s proposals in this area would be unacceptable.

Such news may interest Australians looking to compare term deposits in search of the best investments. According to the Australian, the government’s reforms are also expected to ban commissions paid to financial advisers by investment product manufacturers.

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