June 30 to trigger adviser migration
The dawning realisation that grandfathering arrangements may be put in jeopardy is likely to create a spike in the number of planners changing dealer groups before 30 June.
That is the analysis of Premium Wealth Management chief executive Paul Harding-Davis, who said that while the Australian Securities and Investments Commission (ASIC) had yet to spell out the detailed regulatory arrangements with respect to grandfathering, the 30 June date was being seen as crucial.
"In fact, given the time it takes to complete the transfer to a new dealer group, the crucial date for planners may be somewhere in May," he said.
Harding-Davis' comments have come at the same time as a number of major institutions have continued their efforts to recruit planning practices away from dealer groups, including offering transition payments.
Among those in the market are BT, Commonwealth Financial Planning, Suncorp and MLC.
Being targeted for attention are planning firms allied to AFS, Matrix Financial Planning and, in the case of the troubled AAA group, Suncorp's Guardian Financial Planning.
"The penny has dropped with many planners that they may be at risk of losing their grandfathering if they don't act before 30 June, and that is driving their thinking," Harding-Davis said.
However Synchron chief executive Don Trapnell disagreed that any particular threat to grandfathering was entailed in the 30 June date.
He said that, rather, he was concerned by what he had previously described as "Hotel California" provisions via which licensees were imposing onerous conditions on planners seeking to change groups.
"That is where the real threat to grandfathering exists," he said.
Trapnell said those onerous conditions, which included requiring advisers to make contact with all clients before transitioning to a new company, were problematic where new advice was provided.
"Where that new advice is provided, that will certainly kill off grandfathering," he said.
Harding-Davis said that the concerns around grandfathering and effective dates were likely to generate a challenging few months for boutique groups such as Premium.
"Our concern is the degree to which these events are creating a focus on advice being treated as nothing more than a conduit for distribution," he said.
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