Financial Services Minister Chris Bowen on Monday said banning commissions for financial advisers will restore trust in the industry and protect life savings.

Minister Bowen explained that the financial advise reforms will prevent conflicts of interests that threaten advice quality and avoidance of product recommendations on its products.

"Commissions are inappropriate ... they distort the market and need to go," Bowen told reporters in Sydney on Monday.

"If we are going to restore trust and confidence in financial advice in Australia, it starts with giving investors greater control over the advice they receive and how they pay for it."

Bowen is optimistic that the financial advice will be welcomed by many in the industry, and added that the reform will provide more optional fees for investors since they have greater control over the advice they received from advisers and may also retain its payment flexibility.

The new law will also assist low-income earners to seek financial advice with affordable prices once commissions are banned.

Despite Bowen's optimism, many are opposed with the new reform. Joe Hockey, an opposition treasury spokesperson, reasoned out that low-income earners could not afford financial advice if it has upfront fees.

Federal opposition leader Tony Abbot agreed with Hockey, stating that the law on banning commissions is an attack on small businesses.

The new financial reform will take effect on July 2012.