Removal of grandfathering and rebates was ‘overdue’
The changing of the guard from grandfathered revenue, product commission structures and portfolio administration margins had been overdue and had favoured the economics of conflicted product distribution models, according to CountPlus chief executive, Matthew Rowe.
Flagging the likelihood of the switch from grandfathering and other arrangements showing up adversely on its company’s next results announcement to the Australian Securities Exchange (ASX), Rowe used a communication to Count Financial advisers to point to the end-run benefits of making the switch.
And, in a message to shareholders, Rowe pointed to the company having deliberately reduced adviser numbers.
He said that adviser numbers within Count had declined from 284 at 31 December, 2019, to 231 a year later but noted that the planning group expected a further 40 or more advisers to join the “revamped group” in the second half of this year.
“In terms of known roadblocks, Count Financial has entered a period of cessation of grandfathered commissions and product rebates, and the start of a wholly user-pays model,” Rowe said. “Historically, these grandfathered commissions and product rebates have represented 47% of Count Financial revenue.”
However, he said that the move represented a necessary and purposeful shift, noting that the move was likely to have “a negative financial impact in the second half”.
Recommended for you
With the highest number of candidates in a year sitting the latest financial advice exam, a surge of new entrants are expected in the coming weeks, according to Wealth Data.
AMP has launched a range of five diversified index managed portfolios on its North investment platform, targeting a younger client demographic.
An NSW adviser, who advised over 120 clients after falsifying her financial advice exam results, has been permanently banned by ASIC.
ASIC has released the results from the latest financial adviser exam, the first to be run since changes to its structure earlier this year.
