Govt urged to treat advice commissions like franking credits
If the Government were to apply the same logic to life/risk and grandfathered commissions that it applied to refundable franking credits, then it would opt for their retention, according to financial services business broker, Paul Tynan.
Speaking to Money Management, Tynan said that the similarity between the franking credits debate and that applying to life/risk and grandfathered commissions was that they both involved retrospectivity.
Further, he said that just as retirees had factored refundable franking credits into their income, life/risk advisers had factored in commission-based remuneration and this was a factor in the valuation of their businesses.
“Will the new Coalition Government apply the same principle and review grandfathered commissions because it is also clearly based on the retrospective nature of the changing product design,” Tynan asked.
“The commission in these products has no connection with the ongoing servicing of clients and was developed ‘in product’ because the consumer could not afford or would not pay for the advice."
Tynan’s comments followed on from his earlier assertions that Canberra policy-makers had been unduly influenced by self-interest groups with the result that the advice debate had become hijacked with no heed being paid to consumers, their needs and affordability.
Recommended for you
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
The Senate economics legislation committee has recommended Schedule 1 of the Delivering Better Financial Outcomes legislation be passed as it is a “faithful implementation” of the recommendations.
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
