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.
“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.”