White wants Australian advisers to move to an industry standard commission percentage and has called for a standardisation of clawback terms and fees.

In a speech delivered in Australia this week, White said he believed trail commission should remain in place, but called for stricter processes to be introduced to ensure brokers provided ongoing advice. “Instead of reacting to knee-jerk calls to ban trail, we encourage policymakers to work with industry bodies, regulators and licensees to set standards for regular client reviews to ensure customers can get ongoing service from their broker for no additional cost to themselves,” he said.

White also called for the  introduction of a “bad broker registry list” for advisers guilty of industry malpractice, as well as greater clarity on advisers’ obligations.

White’s suggestions come as a growing spotlight falls on the financial advisory sector, with stricter regulation a likely outcome. Market observers have questioned whether the developments will affect New Zealand advisers. The ongoing Royal Commission into the banking, superannuation and financial services industries has revealed a series of scandals. While in February, Australia’s Productivity Commission recently suggested commissions could be replaced by a fee-for-service model. White said a fee-for-service model would cause adviser numbers to fall,and would be a “massive win for the big four banks” as customers would not be able to access smaller or specialist lenders.

White stopped short of calling for the same regulations in New Zealand, but said he would support regulators as they considered ongoing reform: “The industry is evolving in Australia and New Zealand and this is the next stage of the revolution. New Zealand has its own process, but whatever it is, we will work with regulators. That process is going and we are keen to give them whatever data they need. A strong broking industry that is transparent and well-regulated, with the right ethics and skills, will provide good customer outcomes. It means getting rid of the bad actors.”

White told TMM Online the reform ideas were initially a response to an Australian Securities and Investments Commission review into the advisory sector last year. He said advisers needed to raise their voice amid the political anger directed at the sector: “We originally thought the Royal Commission would make recommendations and we would have a chance to debate. There has been so much outrage about some of the behaviour we have seen that the government will not be able to resist calls for change. We need to get our position out now. Inquiries are all well-meaning and important, but they can sometimes rush to judgement.”