The Financial Planning Association (FPA) is calling to question the apparent double standards consumer group CHOICE has displayed with its Big Bank Switch campaign launched this week.
The program, run by One Big Switch and supported by CHOICE, seeks to get 1000 households to sign up and combine as a single group in order to pressure banks in search of the best loan deal. While supporting any initiative that helps Australians get a better deal with their finances, the FPA has called for greater transparency in what fees are being charged to consumers.
Mark Rantall, CEO of the Financial Planning Association, said:
“The FPA supports the provision of accessible financial advice for all Australians and welcomes initiatives that provide consumers with a fair deal; however it is important that all initiatives launched are transparent and consistent. Since 2006, the FPA has required its members to separate advice costs from product income and in 2009, prior to the introduction of the FoFA reforms, the FPA banned commissions from investments and superannuation with effect from 1 July 2012.
“We believe this campaign is hypocritical of previous arguments made by CHOICE against commission payments to financial advisers. CHOICE has argued over many years for the banning of commissions and supported the ISN’s position on getting rid of ongoing and asset based fees for providers of financial advice, however it is apparent that the Big Bank Switch campaign does just that.
“CHOICE has admitted to receiving a referral fee from this campaign, whilst at the same time continues to be one of the most vocal opponents of commissions paid to financial planners. CHOICE is displaying double standards on payments to those providing financial advice.”