Don’t turn off grandfathered commissions early says AFA
Amid signals by a number of financial services companies that they intend moving sooner, the Association of Financial Advisers (AFA) has called on them to work to the Government’s legislated timeframe for ending grandfathered commissions – 1 January, 2021.
The Government’s Ending Grandfathered Conflicted Remuneration Bill 2019 passed the House of Representatives yesterday and is expected to encounter little resistance in the Senate.
AFA chief executive, Phil Kewin said that in the absence of the three-year transition period which had been sought by advisers, the AFA was calling on the Government and ASIC to provide guidance and assistance so advisers knew what they should do to help their impacted clients.
“We particularly call on ASIC [Australian Securities and Investments Commission] to consider all options to simplify the advice requirements for advisers, so that they can help as many of these clients as possible before the deadline,” he said noting that the AFA was also calling on product providers to work to the legislated timeframe of 1 January, 2021.
“In many cases, turning off grandfathering before the legislated date will only serve to stop advisers being paid, the benefit may not be passed onto the client and the ongoing servicing will be left to the institution providing the product,” he said.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
