The Association of Financial Advisers (AFA) has backed the removal of the stamping fee exemption arguing that very few financial advisers have ever utilised the regime but have nonetheless been blamed for exploiting a loophole.
In a submission to Treasury, the AFA has lined up with the Financial Planning Association in suggesting that the stamping fee exemption runs contrary to the Future of Financial Advice (FoFA) rules and that the AFA supports those rules.
“Whilst we do not support an exemption for capital raisings for investment entities, we do support the continuation of the original November 2012 exemption that applied for capital raisings for operating companies, which we believe supports the capital markets and investment in Australian companies,” the AFA submission said.
However it said that, in supporting this tighter application of stamping fees, it was important to note that “we do not believe that this is applicable to our members, since it appears that they are not utilising it”.
“It is our view that the availability of the stamping fees exemption for investment vehicles, such as listed investment companies and listed investment trusts, creates an unlevel playing field, since the receipt of similar benefits for the placement of investments into unlisted investment vehicles is not permitted under the FoFA legislation,” it said.
“The AFA supports the FoFA ban on the payment of conflicted remuneration on the recommendation of investment products. We therefore support amending the stamping fee exemption, so that it is once again restricted to operating businesses and excludes investment entities.”
“In the context that very few financial advisers utilise the stamping fee exemption, it has been a source of significant concern to our members, that the media has suggested that this exemption is a loophole that has been exploited by financial advisers. This is, in our view, an incorrect characterisation of this issue, and unfortunately another case where financial advisers have been unfairly treated.”