Grandfathered commissions should cease as soon as reasonably practicable and to the maximum possible extent, according to the Australian Securities and Investments Commission (ASIC).
The regulator has used a submission to the Productivity Commission (PC) inquiry into superannuation competitiveness and efficiency to argue strongly for the removal of all commissions, even while acknowledging the transitional grandfathering arrangements under the Future of Financial Advice (FoFA) legislation.
“Trailing commissions were banned under the FoFA reforms going forward, but those already in place continue to be paid under transitional (grandfathered) arrangements,” the submission said.
“ASIC’s position is that grandfathered commissions should cease as soon as reasonably practicable and to the maximum possible extent,” it said.
“Short of a more rapid phase out of trailing commissions, we support the PC’s (Draft Recommendation 13) that there be more transparency about the extent trailing commissions are still paid by members of a fund and that any trailing commissions paid are disclosed periodically to the member,” the submission said.
It said that ASIC would explore ways to make the information public in a comparable manner.