MLC super opted for grandfathering over adviser loss
The trustee board of the MLC Superannuation Fund sanctioned the grandfathering of adviser commissions as part of a successor fund transfer for fear of financial advisers taking their clients elsewhere.
Under questioning at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the former chair of the NAB/ML Superannuation Fund trustee board, NULIS, Nicole Smith said the view of the trustee board had been that there was a significant risk of a loss of member if the grandfathered commissions were not retained.
“We thought there was the potential for an attrition risk if we removed grandfathered commissions,” she said.
“I think we thought that the risks called out were real and that in the context of the timing of the successor fund transfer it was appropriate to grandfather commission,” Smith said.
The former NULIS chair said that she could not speak to whether advisers who chose to remove their clients from the MLC fund over an end to grandfathered commissions would have been acting in the best interests of their clients.
Smith agreed with counsel assisting the Royal Commission, Michael Hodge QC, that among the beneficiaries of the board’s decision were related party financial planning businesses, including the MLC wealth business.
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