Key week for life/risk negotiations
This represents a key week for the life/risk sector with the key stakeholders in the so-called Trowbridge debate expected to deliver their final positions to the Assistant Treasurer, Josh Frydenberg after Friday.
Money Management understands that the major stakeholders — the Financial Services Council (FSC), the Association of Financial Advisers (AFA) and the Financial Planning Association (FPA) will be meeting this week in an effort to establish an agreed position on life/risk remuneration replacing existing high up-front commissions.
It is understood that the degree to which a single position will be capable of delivery to the minister will depend on the outcome of a meeting of the FSC board.
The major financial planning groups have made clear that they believe that the new practices in place by life/risk licensees such as Fortnum and the Centrepoint Alliance substantially replacing upfront commissions with hybrid remuneration arrangements represent the way forward for the position to be taken to the minister.
However AFA chief executive, Brad Fox, said his organisation strongly believed that once common ground around the new remuneration arrangements had been established, the new regime should be given time to work with a review after five years in similar fashion to the review arrangements agreed for the Future of Financial Advice (FOFA) changes.
Money Management understands that the key issue for the stakeholders is the actual make-up of the remuneration hybrid and whether the minister would be prepared to accept a formula such as 80/20 or something less.
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