The newly released draft Future of Financial Advice (FOFA) regulations indicate all financial contracts entered into prior to the application date of new regulations will be grandfathered.
Some industry participants have expressed concern that where a client book or practice is sold or there is a change of licensee, this could result in contracts no longer being grandfathered.
"The intention of the grandfathering arrangements is to preserve any existing contractual rights to receive ongoing product commissions, but not to allow commissions on 'new' financial products acquired on or after the application day," the draft explanatory statement states.
