Don’t turn off grandfathered commissions early says AFA

Amid signals by a number of financial services companies that they intend moving sooner, the Association of Financial Advisers (AFA) has called on them to work to the Government’s legislated timeframe for ending grandfathered commissions – 1 January, 2021.

The Government’s Ending Grandfathered Conflicted Remuneration Bill 2019 passed the House of Representatives yesterday and is expected to encounter little resistance in the Senate.

AFA chief executive, Phil Kewin said that in the absence of the three-year transition period which had been sought by advisers, the AFA was calling on the Government and ASIC to provide guidance and assistance so advisers knew what they should do to help their impacted clients.

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“We particularly call on ASIC [Australian Securities and Investments Commission] to consider all options to simplify the advice requirements for advisers, so that they can help as many of these clients as possible before the deadline,” he said noting that the AFA was also calling on product providers to work to the legislated timeframe of 1 January, 2021.

“In many cases, turning off grandfathering before the legislated date will only serve to stop advisers being paid, the benefit may not be passed onto the client and the ongoing servicing will be left to the institution providing the product,” he said.

 




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Unconscionable conduct is a statement or action so unreasonable it defies good conscience. Section 21 of the Australian Consumer Law (ACL) prohibits unconscionable behavior in connection with the supply of goods or services, or the acquisition of goods or services, in business transactions.

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