Grandfathering a game of diminishing returns
Financial planners should regard grandfathering as a diminishing resource, according to Institute of Managed Account Providers (IMAP) chairman, Toby Potter.
Discussing the use of Managed Discretionary Accounts (MDAs) during the Financial Planning Association national congress, in Adelaide, Potter said this week's events in the Senate had driven home degree to which the Future of Financial Advice laws and their impact on remuneration had had "very corrosive" impact on dealer group revenues.
However he said that even before the this week's changes in the Senate, grandfathering ought to have been regarded as diminishing resource in terms of what it could deliver beyond providing planners and dealer groups time to consider the development of a different model.
Potter said he believed Managed Discretionary Accounts needed to be viewed as a part of the revenue model moving beyond FOFA and conflicted remuneration.
He claimed there were a number of practical difficulties attaching to the new fee models and particularly exposed to "opt out"' something which was not the case with the fee arrangements around MDAs.
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