Commissions must go: Inquiry told

In an oral submission, executive director of Stewart Financial Group Nick Stewart told the committee that commissions create incentives for advisers to sign up as many clients as they can without providing them with full financial services, and were detrimental to the industry.

"We advocate that commissions should be banned - there will be a lot of attrition in the adviser market and a number of people will not see value" in financial services, he told the parliamentarians. The downside of this is that advice would be limited to those people who can afford to pay fees, he said.

Stewart was one of five oral submissions today, which included Ross Butler of the Code Committee, the Institute of Directors, sharebroker Chris Lee and accountant Murray Lazelle.

Butler said he was restricted in what he could say as the code committee is in the process of receiving submissions on issues such as commissions, and will be in a better place to provide information to the MPs when the draft code is ready in February.