Industry organisations have applauded parliament's restoration of the grandfathering provision in the latest round of the Future of Financial Advice (FOFA) reforms, claiming it overturned a rule that shackled advisers to one licensee.
Yesterday afternoon, a bi-partisan deal was struck between the Government and the Opposition to reinstate a number of FOFA changes, including grandfathering.
It means that advisers can move to a new licensee while retaining their grandfathered remuneration.
The Financial Planning Association (FPA), the Association of Financial Advisers (AFA) and the Financial Services Council (FSC) have each released statements saying they support the amendments.
The FPA's CEO Mark Rantall said the changes are recognition that allowing advisers to freely move between licensees is crucial to a competitive advice environment.
The AFA's CEO Brad Fox said it is also an important win for clients, recognising their right to choose their adviser.
He also stressed how important it is for competition in financial advice.
"Smaller licensees will be able to grow their adviser numbers, new licensees will be able to launch and larger licensees will need to continue to compete to retain their existing advisers," he said.
The FSC's director of policy Andrew Bragg said it will protect the value of financial advice practices when they are sold.
"This is good news for small businesses as they will not be subject to unfair, retrospective losses," he said.
Meanwhile, BT's CEO Brad Cooper said the move was a sign both parties are willing to join forces to make the policy workable at a practical level.
"Financial advice needs to remain affordable and accessible to all Australians and we have no hesitation in committing to continuing to work with all sides of politics to achieve this in any future policy announcements," he said.
"While some concerns remain, it is now clearly up to the industry to work through the practicalities of implementing the legislation and minimising the cost impact and disruption to clients."
