There is a desperate need for certainty and guidance around the removal of grandfathered remuneration in circumstances where none of the submissions presented as part of the Government’s consultation process have been published, according to the Association of Financial Advisers (AFA).
What is more, the AFA has urged that implementation of the legislation be put on hold until the implications are fully known.
AFA general manager, policy and professionalism, Phil Anderson, said that there was a serious dearth of information available to the industry in circumstances where other than a recommendation from the Royal Commission and a few supporting statements, all the Government had delivered was a statement of intention and now the legislation.
“The consultation process has been limited to consideration of the draft legislation and, to the best of my understanding, there has been no formal consultation events,” Anderson said in an analysis published to members.
“It is now seven and a half months since the release of the Royal Commission final report and we still have nothing. There is no guidance and no consensus on what needs to be done.”
Anderson said that the Treasury had run a round of consultation on the draft grandfathered conflicted remuneration legislation that closed on 22 March, but six months later the submissions received by the Treasury had not been released despite the legislation passing the House of Representatives and sitting in the Senate.
“Surely the release of these submissions should assist the consultation process and inform the debate,” he said. “A further round of consultation occurred with respect to draft regulations, however submissions in response to this have not been published either.
“In the current information vacuum, product providers, licensees, fund managers and financial advisers are looking for guidance. The time has come for the Government, the Australian Securities and Investments Commission (ASIC) and product provider organisations to deliver,” Anderson said.
“Face to face round table consultation and further research is essential to develop a detailed understanding of the complexity of the issue. The passing of this legislation should be put on hold whilst the work is done to understand the implications of this reform and to allow for sensible solutions to be developed. Otherwise this will inevitably go down in history as a policy disaster.”