"The policy will deny lower income earners and pensioners access to low cost financial advice.” – DLP Senate Team Leader Tony Zegenhagen
Queensland’s DLP Senate Team Leader Tony Zegenhagen warns that small businesses and low income earners will suffer under the new zero-commissions regime announced by Chris Bowen, Minister for Financial Services.
“This announcement will drive out of business many honest and long serving small business people in the field of financial advice,” said Mr Zegenhagen, an experienced finance broker who is trained in accounting. “The policy will deny lower income earners and pensioners access to low cost financial advice.”
“Under present arrangements, adviser and client can choose to agree on one of several payment options. These options include an hourly upfront fee, a percentage of the funds under management, disregarding the leverage component; or full payment upfront. Other options include payment out of the investment return over time.”
“Investors will now have no choice but to pay upfront for advice,” said Mr Zegenhagen. “This can be onerous and prohibitive for people who have been happy to grant a share in their profits to an ethical adviser.”
“Retail costs of the smaller financial houses will rise as they are forced to employ additional staff to take up the slack by the loss of so many advisers who’ll be forced out of the industry.”
Mr Zegenhagen said: “This is a big win for the big four banks and a big loss for ordinary people.”
