Movement within the financial planning industry has been effectively brought to a halt by the Government entering caretaker mode, with the Federal Treasury therefore unable to obtain ministerial sign-off on a regulation clarifying the application of grandfathering for advisers who change licensees.
Premium Wealth Management chief executive Paul Harding-Davis said he believed the reality confronting advisers was that migration between licensees would need to be put on hold until after the 7 September Federal Election.
He said that he believed most dealer groups would be placing recruitment on hold on the basis that current legislative and regulatory interpretations suggested planners changing licensees would lose the grandfathering applying to the clients they took with them.
This was confirmed by Association of Financial Advisers (AFA) chief operating officer, Phil Anderson, who said that the industry needed more than just a change in interpretation with respect to grandfathering, requiring a definitive regulation which could provide certainty.
However he said that could not happen until a new Government was elected and the Treasury could put such a regulation before a new minister.
Anderson said that, in the meantime, he was concerned about instances where planners had changed licensees after 1 July and, as a result, had placed their grandfathered remuneration at risk.
He said that as the regulations were currently being applied, those planners could not be paid grandfathered remuneration.
Financial Planning Association chief executive Mark Rantall said he believed that any amendments to the grandfathering regulations would not occur until after the election, although Treasury would continue to work on the issue during the caretaker period.
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