Surprising quite a few commentators, the Coalition secured a major win on election day this year.
Now that the dust has more or less settled, though, what does Scott Morrison’s victory mean for financial services, and the country more broadly? Let’s start with superannuation.
Super changes
As discussed recently, the Government will delay the start date for ensuring super funds only offer insurance on an opt-in basis – at least for accounts with balances of less than $6000 or new accounts belonging to under-25s – to October 1st.
On top of this, those aged 65 to 66 will be allowed to make voluntary super contributions without meeting the work test from 1 July 2020.
Perhaps most notably, Labor’s proposal to eliminate cash refunds for excess imputation credits will now not be going ahead.
Advice fees
Both parties presented different proposals as to how they would respond to the Royal Commission final report.
Under the Morrison Government’s plan, grandfathering of the conflicted remuneration provisions will cease by 1 January 2021; any grandfathered conflicted remuneration at this date will be rebated to clients.
Further, advice fees (outside infra-fund advice) will no longer be able to be deducted from MySuper accounts; requirements for entities to investigate the “full extent of financial adviser misconduct” will be increased; and a “holistic approach” for disciplining advisers will be established through a central body.
There are numerous other responses to specific recommendations made by Commissioner Hayne, but perhaps one of the most pivotal is the Government’s agreement that advisers must now seek annual renewal of ongoing fee arrangements, which Connect Financial Service Brokers CEO Paul Tynan recently said has had a meaningful effect on advice practice valuations.
Wrapping it up
We’ll keep you posted on any updates the Morrison Government makes to its agenda, particularly as it pertains to super and advice.
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