Australian Labor makes commission U-turn

The opposition party previously indicated it would agree with all of the recommendations from Kenneth Hayne's Royal Commission report.

The Royal Commission final report called for a fee-for-service model paid for by customers, a ban on trail commission, and a broad ban on other forms of commission. Hayne's call to ban trail commission is set to come into effect next year.

Labor's decision to oppose a fee-for-service model is politically significant, and aligns with the country's Liberal party. A move to ban all commission is now unlikely to pass through parliament. Labor said it changed its mind after reviewing guidance from the Productivity Commission, which warned a fee-for-service model would hurt competition. 

The U-turn comes after the Australian broking industry launched a fierce campaign against reforms. Major broking groups including Loan Market encouraged customers to petition the government, while industry body the MFAA rolled out a national advertising campaign. The adviser industry believes a fee-for-service model will drive customers direct to their bank.