Planners lose grandfathering on FirstChoice
Financial planners working under the Commonwealth Bank umbrella are facing changes to their grandfathering arrangements as a direct result of a review of the bank's product set following the Senate's disallowance of the Government Future of Financial Advice (FOFA) regulatory changes.
The review, carried out under the facilitative compliance period notified by the Australian Securities and Investments Commission (ASIC) has resulted in the Commonwealth Bank concluding that its FirstChoice Super product does not meet the grandfathering requirements with respect of transfers from super to pensions.
Money Management understands that as a result of that analysis, the Commonwealth Bank planners have been told they will not be receiving grandfathered payments on super to pension transfers related to FirstChoice after 1 July.
However, it is understood that the same issues do not apply to the bank's Colonial First State FirstWrap product and that payments to planners will retain their grandfathered status.
Money Management understands that the Commonwealth Bank's consideration of the grandfathered status of the products following the Senate's disallowance of the Government's FOFA regulations was complex, particularly with respect to platforms and their dealing with advisers and their clients.
It is understood that grandfathered payments might be permitted but only in circumstances where the platform provider has adequate evidence enabling them to make these payments.
The Assistant Treasurer, Josh Frydenberg, has indicated that the Government will not be again seeking to test the Senate numbers by regazetting the FOFA regulations and that, instead, it will continue negotiating any necessary technical changes with the Federal Opposition.
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