Grandfathering changes already impacting acquisitions
The new grandfathering arrangements are already having an impact on both dealer group recruitment and business acquisition decisions, according to Premium Wealth Advisers chief executive Paul Harding-Davis.
Commenting on concerns expressed by Association of Financial Advisers (AFA) chief executive, Brad Fox, that grandfathering would cease where advisers changed licensees, Harding-Davis said the reality had already bitten a number of advisers.
He said he knew of at least one adviser who had agreed to buy a book of business but suddenly realised that many of the clients he was acquiring were invested in a major wrap and that the grandfathered trailing commissions would cease because the clients would effectively be moving to a new licensee.
Further, Harding-Davis said because the clients were in a wrap a large element of the trails involved in the aborted transaction represented life/risk business.
He said he believed the grandfathering changes would also act as an inhibitor to the migration of planners between licensees, and this was something dealer groups were already beginning to take into account.
“The knowledge that moving between licensees will put grandfathered arrangements at risk will make it a very difficult decision for planners,” Harding-Davis said.
The AFA has signaled it is in discussion with Treasury officials with respect to the grandfathering arrangements, which it regards as anti-competitive.
AUTHOR
Mike Taylor
Recommended for you
Professional services group AZ NGA has made its first acquisition since announcing a $240 million strategic partnership with US manager Oaktree Capital Management in September.
As Insignia Financial looks to bolster its two financial advice businesses, Shadforth and Bridges, CEO Scott Hartley describes to Money Management how the firm will achieve these strategic growth plans.
Centrepoint Alliance says it is “just getting started” as it looks to drive growth via expanding all three streams of advisers within the business.
AFCA’s latest statistics have shed light on which of the major licensees recorded the most consumer complaints in the last financial year.
