Compliance issues continue to erode BOLR pay-outs
The private contractual nature of Buyer of Last Resort (BOLR) arrangements has meant that the major financial planning organisations have had little scope to become involved in the issues which have arisen between planners and their licensees.
Amid continuing reports that the value of BOLR arrangements have been eroded through the so-called “weaponization” of compliance audits and the Government’s decision to hand the Australian Financial Complaints Authority (AFCA) the ability to look back at complaints dating back 10 years, advisers have found themselves facing some tough decisions.
This much was acknowledged by Financial Planning Association (FPA) chief executive, Dante De Gori, who said while issues around BOLR had been raised by members during his organisation’s recent national roadshow, there was little that could be done because of the individual nature of the BOLR contracts.
He said that, very often, the best advice that could be given was that affected planners should contact their lawyers.
Association of Financial Advisers (AFA) chief executive, Phil Kewin, said that his organisation was similar aware of some of the BOLR issues but not closely involved.
At least one of the problems which has emerged is adviser record-keeping in circumstances where industry convention has held that records should be kept for a minimum of seven years but where the Australian Securities and Investments Commission (ASIC) fee for no service investigations and AFCA’s legacy complaints changes are looking back 10 years.
Advisers have told Money Management that the imposition of tough compliance audits had seen the value of some BOLR pay-outs reduced to as little as one times earnings.
Recommended for you
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
Private market secondaries manager Coller Capital has unveiled a new education platform to improve advisers’ and investors’ understanding of secondaries.
