NAB/MLC retained grandfathering to retain planners
NAB/MLC decided to pursue keeping grandfathered payments to financial planners as part of a successor fund transfer (SFT) process because of its concern that planners and their clients would take their business elsewhere, the Royal Commission was told today.
Giving testimony before the Royal Commission into Banking, Superannuation and Financial Services, former MLC/NAB executive, Paul Carter acknowledged that it had been open to NAB/MLC to abandon the grandfathered payments, but it had chosen not to.
He said that this was because of the contractual arrangements with the planners and the likelihood the planners would be dissatisfied and take their business elsewhere.
However, Carter later acknowledged under questioning from counsel assisting the Royal Commission, Michael Hodge QC, that contractual arrangements with the planners would not have been an issue for the trustee of the fund, NULIS.
Hodge asked whether, given advisers’ best interest obligations, it would have been wise to move clients out of commission arrangements.
Carter said he believed the two positions could be reconciled because of the MLC products were available to the clients.
Seeking clarification of what had occurred, the Royal Commissioner, Kenneth Hayne sought clarity from Carter around what had been pursued was a platform transfer rather than a successor fund transfer.
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.
