The Royal Commission has taken another approach to post-Future of Financial Advice grandfathering, this time around platform volume-based fees and fund manager shelf space fees.
The Royal Commission has also questioned why IOOF general manager, distribution, Mark Oliver was nominated by IOOF to appear before the Commission rather than IOOF managing director, Christopher Kelaher.
Oliver said he believed he had been nominated to appear because most of the issues in question fell within his role.
Counsel assisting the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Michael Hodge QC asked Oliver, the circumstances behind agreements being entered into with fund managers five days before the Future of Financial Advice (FoFA) legislation came into effect in 2013.
Hodge commented that what had happened was after July 2013 volume-based shelf payments were banned, except to the extent they reflected actual costs and he suggested the payments reflected in the 2013 document were grandfathered payments.
Explaining his approach, Hodge questioned whether if a payment was as a percentage of funds invested, unlinked to the value of service provided, it was likely the payment would vastly exceed the value of the service provided.