BT takes payment push to Canberra

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BT Financial Group, the dominant player in the investment platform market, is consulting with the Government and regulators about potential reforms in the financial advice industry in an effort to convince legislators that investment platforms are service, rather than product, providers.

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Defining platforms as services providers would mean payments from platforms to dealer groups would be excluded from any legislative ban on commissions to advisers or product-specific volume rebates to licensees.

John Shuttleworth, the head of BT Financial Group’s platforms business, which encapsulates both the BT and Asgard platforms, visited Treasury officials in Canberra recently to discuss the proposed changes. The group has also been in continuing close contact with the Minister for Financial Services, Chris Bowen, and the heads of the Government’s reviews into the superannuation and advice industries, Jeremy Cooper and Bernie Ripoll.

The group argued volume rebates between platforms and dealer groups did not create conflict, and pointed to

the fact that the payments are product agnostic and represent fee discounting at a business to business level, and as such did not directly influence adviser actions.

Shuttleworth said some Treasury and other government and regulatory officials were coming to the view that platforms represent a custodial service, and did not impact the relationship between advisers and investors. On coming to that conclusion, officials “start to appreciate that there’s some work they need to do to make sure that when they implement the legislation, they don’t create unintended consequences that mean the industry can’t function effectively”.

“You can’t run a platform without a dealer group,” Shuttleworth said.

“[Dealer groups] are talking to the customers, entering all the information around the investments, they’re doing service and somewhere along the way they have to get paid for that. Whether they’re paid a fee as part of an admin fee or whether they charge that separately, they’ve got to get paid for it.”