Why the bill ending grandfathering was short-sighted

Alex Burke,  Senior Writer,  No More Practice Education

With the passing of the Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Bill 2019 through the House of Representatives - it's now before the Senate - the Association of Financial Advisers has hit out on perceived flaws in the legislation.

AFA chief executive Philip Kewin has argued for a three-year transition period so as to allow advisers time to "find solutions for their impacted clients, including making sure that the right product options are available."

He said the AFA is "deeply disappointed" with what the association believes was a lack of analysis, communication and guidance leading up to the drafting of the bill, adding there will now be "many thousands of cases where a sensible solution is simply not available.”

To mitigate these problems, the AFA has requested the Government and ASIC provide assistance with advisers looking to help clients who could now be impacted by additional costs or who may even lose access to their current adviser.

"We particularly call on ASIC to consider all options to simplify the advice requirements for advisers," Kewin continued, "so that they can help as many of these clients as possible before the deadline.”

When Treasurer Josh Frydenberg and Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume introduced the bill, they said it would benefit retail clients "as they will receive higher quality advice and stop paying higher fees to fund grandfathered conflicted remuneration.

“Commissioner Hayne made it very clear in the Royal Commission Final Report that this grandfathering shouldn't continue."


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