Have product providers jumped the gun on grandfathering?

24 May 2019
| By Mike |
image
image
expand image

Financial advisers have expressed anger at the manner in which some major product providers have written to clients about the switch-off of grandfathered commissions before the Government has even legislated on the recommendations of the Royal Commission.

Responding to reports in Money Management about the manner in which major investment bank, UBS has downgraded its earnings expectations on AMP and IOOF and pointed to platform profits declining by as much as 30 per cent, advisers have pointed to clients receiving letters from product providers telling them how to switch off commissions.

One adviser specifically referenced ANZ’s OnePath as having written to advice clients telling them they could request the switch-off of commissions on their account without needing to contact their adviser.

The advisers said they were angry that companies were looking to act on grandfathered commissions ahead of the Government’s 2021 switch-off date and the actual passage of legislation.

The letters sent to clients were understood to have been received ahead of the outcome of the 18 May federal election.

The Treasurer, Josh Frydenberg in late March announced exposure draft legislation to ban grandfathering of conflicted remuneration paid to financial advisers from 1 January, 2021.

He also announced the issuing of a ministerial direction requiring the Australian Securities and Investments Commission (ASIC) to undertake an investigation to monitor and report on industry behaviour in the period 1 July, 2019 to 1 January, 2021.

The Federal Opposition had signalled before election that it was disposed towards the almost immediate end to grandfathered commissions.

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 5 days ago