Coalition declares approach on grandfathering
The Federal Opposition has signaled the approach it will take to grandfathering in the event it wins the forthcoming Federal Election, with clients ultimately determining the issue.
The Shadow Assistant Treasurer, Senator Mathias Cormann, said grandfathering in relation to a planner's existing clients should not be impacted by changing licensees.
"In relation to existing clients subject to grandfathering, it should be the client's choice that determines the approach. That is, if a client actively changes their arrangements, the Future of Financial Advice (FOFA) provisions should apply," he said.
Otherwise, Cormann said that if the arrangements between a client and his or her planner remained unchanged, then grandfathering should continue where a licensee sold their book of business.
"Any other approach causes inappropriate and counterproductive distortions in the market," he said.
Cormann's comments have come amid concerns that the current grandfathering interpretations being utilised by Treasury would see advisers who change licensees losing grandfathering with respect to existing clients.
Further, any change to that interpretation is dependent upon Treasury changes and ultimate sign-off by the minister.
AUTHOR
Mike Taylor
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