AFA warns on grandfathering
The Association of Financial Advisers (AFA) has warned planners to adopt a cautious approach to changing licensees in circumstances where they may place themselves at risk of losing grandfathering for existing clients.
AFA chief executive Brad Fox said his organisation was currently in talks with Treasury officials seeking to resolve what had emerged as a problem with grandfathering flowing from the additional guidelines issued on 28 June.
He said those guidelines were being interpreted as meaning that an adviser could not change licensee and, at the same time, carry forward the grandfathering arrangements for existing clients - something the AFA regarded as highly anti-competitive.
“If this is how the grandfathering scenario is to play out then it seems to fly in the face of the original intention of the Future of Financial Advice (FOFA) to make the financial planning industry more competitive,” Fox said.
“It simply does not make sense to impose something like this, which has the effect of freezing the marketplace and of disadvantaging new or emerging licensees,” he said.
Fox said the AFA had expressed its concern to the Government and would be continuing to work with Treasury officials to resolve the issue.
AUTHOR
Mike Taylor
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