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.”
Comments
This is a Govt cover up.
The Govt have repeatedly refused to release the Australian Government Solicitor's legal advice provided to Bill Shorten in 2011 regarding the exemption of grandfathered commissions from FOFA despite several attempts to access it under the Freedom of Information Act. There have been formal requests for reviews of the decision from Treasury and again it has been rejected.
It is entirely apparent there has been instruction provided to refuse access to this information.
Josh Frydenberg is complicit unless he opens up this matter to thorough and detailed analysis and provides an adequate and transparent process to proceed.
The Govt has refused access because they do not want any form of information to be made available that states exactly why the legislative removal of these decreasing commission payments will be problematic.
This is about control, deception and concealment.
It is also about political power and the media.
Frydenberg well knows that if he allows the proper process to take place or to quarantine grandfathered commissions to allow them to run their course as FOFA intended, the left wing media will hammer him from every corner.
Frydenberg needs to take a good hard look at himself and decide if he is to allow a decision to proceed based on scant fact and analysis that will possibly negatively effect many consumers in addition to placing many small businesses in a position whereby they will fail due to no fault of their own.
The level of misunderstanding, misinformation and manipulated information in respect to this particular matter is negligent in the extreme.
The light weight, unsubstantiated commentary suggesting the the removal of commissions for existing client business or the potential removal of insurance commission remuneration will simply "enhance consumer outcomes" without any documented evidence of how this will occur has to end.
Kenneth Hayne refused to shake your hand Josh...so why on earth do you feel like you have to shake his ?
Nailed it!
The people in government, ASIC or most politicians simple don't care what the consequences are to consumers, advisers or to the financial services industry..
The treasurer, unfortunately thinks he will make his mark with the legislation, and use it as stepping stone to the top job by destroying many many financial services businesses.
The sad fact of the matter is, that not many clients have indicated their dissatisfaction with the present remuneration arrangement, but they certainly will when they are asked to draw a cheque at the beginning of an arrangement, a cheque for ongoing service and a cheque requiring assistance in the event of a risk insurance claim.
Sounds like a plan to me.
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