As part of the Future of Financial Advice (FOFA) reforms in Australia, all commissions on superannuation risk insurance are to be banned as well as volume-based payments.

Australia's Minister for Financial Services and Superannuation, Bill Shorten MP, said the reforms would benefit consumers and encourage more Australians to seek financial advice.

"The FOFA reforms focus on improving the quality of financial advice and expanding the availability of more affordable forms of advice," he said.

"These reforms will see Australian investors receive advice that is in their best interests, rather than being directed to products as a result of incentives or commissions offered to an adviser."

Lee said the Australian ban focused on insurance linked to superannuation schemes, and given New Zealand's different scheme rules were irrelevant to this country.

"Essentially in terms of stand-alone insurance advice - which is the New Zealand context – there is no change," he said.

Professional Advisers Association (PAA) CEO Edward Richards also agreed changes would not be happening in New Zealand, with commission "not on the Government agenda at the moment."

He said the Government acknowledged commissions make insurance affordable and are a valuable part of the marketplace.

Insurance commission has been "unfairly sullied" according to Richards, despite being "a win-win for both the client and insurance adviser."

Lee said he believed a commission ban would be unnecessary with AFA rules now requiring greater transparency on issues such as fees and adviser remuneration.

"Our view is and always has been that remuneration is at the discretion of the adviser. We think what's more important is that the client has gone through a good advice process, which is why we've got the six-step process. The adviser has been professional on how they take them through that process, and particularly that the adviser is upfront in disclosing how they're remunerated."

Lee also disagreed with Shorten's view that banning commissions would encourage more people to seek financial advice.

Arguing that conflicts of interest will always exist in life, Lee said transparency was the key and that debates around commission were a distraction.

"What's more important is that you learn how to manage them [conflicts of interest] and that's actually a more adult approach and gives power back to both the adviser and the consumer to decide. Getting good advice and products that are solutions to client needs is much more important."

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