Financial advisers have expressed anger at the manner in which some major product providers have written to clients about the switch-off of grandfathered commissions before the Government has even legislated on the recommendations of the Royal Commission.
Responding to reports in Money Management about the manner in which major investment bank, UBS has downgraded its earnings expectations on AMP and IOOF and pointed to platform profits declining by as much as 30 per cent, advisers have pointed to clients receiving letters from product providers telling them how to switch off commissions.
One adviser specifically referenced ANZ’s OnePath as having written to advice clients telling them they could request the switch-off of commissions on their account without needing to contact their adviser.
The advisers said they were angry that companies were looking to act on grandfathered commissions ahead of the Government’s 2021 switch-off date and the actual passage of legislation.
The letters sent to clients were understood to have been received ahead of the outcome of the 18 May federal election.
The Treasurer, Josh Frydenberg in late March announced exposure draft legislation to ban grandfathering of conflicted remuneration paid to financial advisers from 1 January, 2021.
He also announced the issuing of a ministerial direction requiring the Australian Securities and Investments Commission (ASIC) to undertake an investigation to monitor and report on industry behaviour in the period 1 July, 2019 to 1 January, 2021.
The Federal Opposition had signalled before election that it was disposed towards the almost immediate end to grandfathered commissions.