The Coalition just called time on grandfathering

Alex Burke,  Senior Writer,  No More Practice Education

 

Speaking at a Stockbrokers and Financial Advisers Association conference, Assistant Treasurer Stuart Robert spoke plainly about the re-elected Coalition Government's plans for the advice industry.

He said that while advice "has been an important part of the wider Australian economy, generating billions in revenue and employing tens of thousands of people," the landscape is "evolving and we need to adapt."

Robert referenced the fact that most major banks are selling their wealth arms, and that the same time "financial advisers have been exiting institutionally affiliated and owned businesses to work for privately owned firms."

Alongside these trends, Robert said "the remuneration models for many in the industry are also changing." Pointing to the Royal Commission, which recommended ending grandfathering of conflicted remuneration, he said "grandfathering has now been in place for over five years, providing industry with sufficient time to transition to the new arrangements."

Robert argued that given this, it was, ultimately, "now appropriate for grandfathering to end."

"The Government is in the process of implementing the Hayne recommendation," he continued. "It should be noted that many banks and other financial institutions, in response to Hayne, have already off their own bat banned grandfathered conflicted remuneration – to the extent that they can."


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Paul Gerard Tynan

28/05/19

Well that's great. So I have 1,200 past or present corporate super members, some of whom pay me, some of who use services extensively and all of them will not be able to afford or pay for advice services from their super fund. This applies even when they have opted in to retain me. If all the Hayne reforms are implemented there will be far less advice provided. Disclose? Yes, but let the consumer decide. I have negotiated an outstanding low fee package for my members, if I am not there as adviser the members cost revert to the normal which in some cases is a higher fee structure or premium than they paid while I was a retained adviser. The Government has not thought this through as usual.

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