ASIC and the FPA have made several recommendations to the Royal Commission, including eliminating the practice of grandfathered advice commissions.
In its second round submission to the Commission, ASIC said it was concerned ongoing advice arrangements do not provide a benefit to customers commensurate with the fees they pay.
The regulator attacked grandfathered commissions, recommending the industry move to eliminate the practice "as soon as reasonably practicable and to the maximum possible extent."
The regulator cited evidence provided to the commission by executive general manager of CBA's private banking arm, Marianne Perkovic, who highlighted an offer of an annual review was sufficient for ongoing service fees to be charged to a customer.
ASIC said these reviews were likely to be of "limited value" to many customers, and took exception to licensees charging fees for an offer of a service, rather than the provision of one.
The Financial Planning Association (FPA) also made a raft of recommendations in its response to the Royal Commission, again centred on the removal of grandfathered commissions.
The association agreed with ASIC's recommendations over ending grandfathered submissions, but suggested a three-year timeline to phase out the practice.
Additionally, the association admitted that FoFA obligations which were introduced to manage conflicts of interest between advisers and product manufacturers working for the same organisation, had been ineffective in many instances.
FPA added that while vertical integration may provide some benefits, they are largely "outweighed by the risks and costs to consumers of biased advice."
As such, the association has recommended that large licensees be legally required to operate advice and product manufacturing business entirely separately - calling for different principles, systems and management.
FPA believes that a feature of such demarcation should extend to the banning of cross subsidy practices, maintaining that both advice and product manufacturing businesses should be self-sufficient and sustainable.