Legacy products legislation closer
Richard Gilbert
The financial services industry has broadly welcomed moves by the Federal Government to make it easier for companies to transition clients out of so-called legacy products such as superannuation and life insurance.
With some member companies two years ago being subject to criticism over the fees attached to moving clients out of legacy products, the Investment and Financial Services Association (IFSA) has welcomed the release of a discussion paper by Treasury that suggests the introduction of a single statutory mechanism.
IFSA chief executive Richard Gilbert said his organisation supported the introduction of a single statutory mechanism that would enable customers to be moved from out of date products to more suitable products with similar or improved benefits without financial detriment to the customer.
He said that if a simplified process enabling financial products to be rationalised was not introduced, the costs to the financial services industry and its customers would increase significantly as the number of legacy products increased.
“Investors in rationalised products should be able to effectively rollover their investment for tax purposes,” Gilbert said. “IFSA believes that such a measure should be revenue neutral, and we look forward to further engaging the Government in order to progress this issue.”
The financial services industry has until September 21 to respond to the Treasury discussion paper.
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