Backlash slows ASIC’s termination of grandfathered commissions: AIOFP

6 April 2020

The corporate regulator has decided to slow down their demands to terminate grandfathered commissions because they sense backlash from consumers, according to the Association of Independently Owned Financial Professionals (AIOFP).

In a response to the Australian Securities and Investments Commission’s (ASIC’s) recent announcement on grandfathered commissions, the AIOFP’s executive director Peter Johnston said product manufacturers had “cheated” financial advisers and consumers out of grandfathered revenue prematurely as a result of the Government and regulator’s “arrogance” and “bullying”.

“My view is they are sensing a backlash from consumers who are starting to realise that the cost of advice has escalated due to ridiculous levels of compliance and they are the ones paying for it,” he said.

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“We all thought when a date was legislated it was honoured but apparently not with this Government. The resultant manufacturers cheating advisers and consumers out of grandfathered revenue prematurely is appalling arrogance and tantamount to bullying.

“ASIC however have pointed out on their website that they were pushed into this ‘cheating’ by stating  ‘which we commenced on direction from the Treasurer’…so over the past 12 months we have had manufacturers blaming ASIC for pushing them, now we have ASIC blaming the Treasurer for pushing them…rather pathetic desperate behaviour, akin to rats jumping off a sinking ship.”

Johnston said the AIOFP had sought assistance from the ASIC chair to direct product manufacturers to not switch off grandfathered revenue prematurely so consumers could seek some subsidised advice.

“It is rather weird and fantastical that we have to request regulators and politicians to abide by the legislation detail they put in place,” he said.

“It seems these three industry stakeholders are experts at pointing the finger of blame to avoid accountability, let’s hope they will now address product failure, work it out amongst themselves to share responsibility and stop blaming advisers.”

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What a load of tripe from Peter Johnston . ASIC has clearly stated it is putting a number of matters on hold due to the upheaval caused by COVID-19. What evidence does Johnston have for his statements? Perhaps he should read the preceding article to his in Money Management - 'ASIC creates adviser lee-way on grandfathering'

Billy. If you read the Money Management Article it states that ASIC will not be pushing product providers to remove grandfathered trail commission early, but it also states that ASIC still expects these to be switched off as soon as possible and no later than 1st January 2021 which is the stated deadline.
How is this giving advisers lee-way if the cutoff date has not been extended?
How about you read the full article before making comment.

Come on, ASIC live and operate in the real world just like you and I. That is why they come up with strategies designed to destroy small FP businesses at a time when all other small businesses are also being destroyed. The industry is heading for its own pandemic - small FP Virus

Colonial First State.......would you like to make a comment to Money Management please after you have stabbed 1000's of advisers in the back by turning off commissions more than 6 months earlier than the legislation proposed ?

Colonial First State are hiding. Don't return phone calls, have a "digital approval process" that does not work. They are struggling in the current environment, and rapidly losing my confidence.

We're leaving CFS. Not only their retail version has more and more issues but also the wrap is now antiquated and we've found that in some instances we believe it does not treat all members equally in regards to entitlements, benefits etc especially in regards to taxation and internal processes.

Anyone sticking with CFS by choice is like a band member on the Titanic, enjoy the music while it lasts.

Colonial First State should now compensate affected advisers for the 6-7 months of commission payments that would have continued to be received until the legislated date to end these payments .
They have made the decision to act prior to the legislated date, thereby negatively impacting advisers who are right in the middle of having to provide as much advice to anxious and nervous clients as possible.
It was CFS's decision to implement these changes to benefit them....not to benefit the members and certainly not to benefit the advisers.
CFS have taken away remuneration that originally was grandfathered under law and since been legislated to be stopped by early next year. They have effectively stolen adviser remuneration and must now pay those affected advisers the relative amount from the time they decide to turn it off until the legislated date.

Bloody Hell MM. Why are you still giving a voice to PFOIA. These guys make Donald Trump look modest. Will they claim their lobbying is going to cure Covid-19 too.

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