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
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
In the run-up to heavy losses expected at the end of the financial year, June has already reported consecutive weeks of adviser losses.
ASIC has banned a former NSW adviser from providing advice for 10 years for investing at least $14.8 million into a cryptocurrency-based scam.
ASIC has sent warning notices to social media finfluencers who it suspects are providing unlicensed financial advice to Australians as part of a global crackdown by international regulators.
