Govt regulates directing grandfathered commissions to clients
The Federal Government has released the regulations which will underpin ensuring that any benefits of banning grandfathered commissions flow to consumers rather than product manufacturers.
The Treasurer, Josh Frydenberg announced that the regulations would impose obligations on product manufactures to keep records on the amounts to be passed through to clients.
The explanatory statement attaching to the changes states: “Where the conflicted remuneration can be attributed to a particular client (for example, if the financial adviser received a commission for selling a financial product to that client), the covered person must provide a cash rebate to the affected retail client on a dollar-for-dollar basis”.
“Where the conflicted remuneration can only be attributed to a client group, the covered person must divide that conflicted remuneration between the affected retail clients in a just and equitable way,” it said. “The covered person may provide a cash rebate, or they may provide a monetary benefit (for example, a reduction in fees). The amount of the cash rebate or monetary benefit must be an amount that is just and equitable in the circumstances.”
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
