Financial planning dealer groups have had a tough time over the past year, with adviser funds under advice dropping as quickly as a skydiver, but licensees have since become very adept at performing back flips.

AMP, a staunch defender of commissions for many years, recently told fund managers to kiss commissions goodbye if they want to make the group’s approved product list in 2010.

This followed a strategic move that appeared to bow to industry pressure or perhaps anticipate regulatory change in the financial services industry – with an announcement in August that AMP’s financial planning business would move to a no-commission remuneration model by June 2010.

Professional Investment Services (PIS) could also be contemplating an about-face on commissions after the group was reported to be considering capping the level of commissions its advisers can receive for recommending investment products.

MLC, an early mover among dealer groups, plans to complete the transfer of all of its planning businesses to a fee-based model by July next year, when MLC Garvan Financial Planning and Apogee Financial Planning transition to a new advice model for all new investment and super clients.

The practices join Godfrey Pembroke and NAB Financial Planning, which have already made the transition.

The moves towards fees come as the Parliamentary Joint Committee on Corporations and Financial Services’ Inquiry into Financial Products and Services in Australia draws to a close, and ahead of the Cooper Review’s recommendations, to be delivered to the Government by 30 June, 2010.

In its submission to the Cooper Review, AXA threw its weight behind a proposal being considered in the UK by the Financial Services Authority (FSA) whereby advisers are separated into two categories – independent and restricted – and explicitly charge a fee for advice.

ASIC meanwhile suggested in its submission to the Inquiry that the Government considers whether planners should be banned from receiving any form of commission at all.

It’s hardly surprising that dealer groups are re-examining their business models given the media, regulatory and Government spotlight on the conflicts of interest embedded in commission-based advice.

But why did it take a financial crisis and the threat of heavy-handed regulatory change for them to embrace what now seems like an inevitable transition to a world in which consumers pay a transparent fee for the advice they receive?

Bernie Rippoll, the man behind the Inquiry, has already signaled licensing changes to financial planning products and voiced his opinion that commission payments, by their nature, represent a conflict.

The Inquiry is likely to result in a significant shake up in the advice industry, not only in the provision of and payment for advice but in the role dealer groups and product manufacturers play in servicing financial planners.

Let’s hope the parachutes being inflated by dealer groups in the wake of the financial crisis help to soften the landing for planners as business returns to normal.