Will ASIC’s review tell the whole story on grandfathering?

Grandfathering will come to an end in the Australian financial services industry before the Government actually gains a comprehensive and final picture of potential adverse client outcomes from the Australian Securities and Investments Commission (ASIC).

What is more, ASIC’s final report to the Treasurer, Josh Frydenberg, will not encompass data about the number of individual financial advisers who have been receiving grandfathered remuneration.

These facts have been laid bare in an ASIC answer to a question on notice from the Parliamentary Committee on Corporations and Financial Services which makes it clear that while grandfathering will end on 1 January, 2021, ASIC will not be delivering its final report until six months’ later on 30 June, 2021.

Related News:

ASIC said that in building that final report it would be “seeking to understand factors which impact the ending of arrangements, including potential adverse client outcomes” including those relating to exit fees, capital gains tax and Centrelink.

The ASIC answer said the regulator was obtaining data about the number product providers and products that pay grandfathered conflicted remuneration, the dealer groups and advice licensees who received conflicted remuneration and the “client accounts that grandfathered conflicted remuneration is paid in respect of”.

However, ASIC said it was not obtaining data about the number of individual financial advisers that dealer groups/advice licensees passed grandfathered conflicted remuneration on to.

“ASIC’s quantitative review includes life insurance and annuity product providers to the extent that they were identified as payers of grandfathered conflicted remuneration,” it said. “The ability of product providers to rebate or impediments to them doing so is an issue ASIC intends to explore with a sample of product providers in its qualitative review.”

The ASIC answer to the question on notice has come amidst expressions of concern from groups such as the Association of Financial Adviser (AFA) about the legislation having been imposed without the benefit of a regulatory impact statement.

Recommended for you



Too much interference by Government in this Industry which is killing it. Best Interest duty is enough !

ASICk Joke strikes again. They got away with LIFs, they bullshatted through the entire RC with lies, half truths and misrepresentations of the truth, they have utterly misled parliament on countless occasions... when will they properly be held to account?

Half the problem is that they are largely faceless - no one individual has been made to be accountable for all. Washed up Shipton is a joke, Kell & Medcraft were left to wreak ruin amongst FP profession and then walk away despite their completely lying ways, and now the ex-lawyers can't believe how easy this shite is compared to being held accountable in courts with regards to actually providing irrefutable evidence before the guilty verdict and penalty has been handed out.

It won't.. it doesn't suit ASIC, The Political Rhetoric or the Big Banks, so saying that, let's rush through the passing of the Legislation... everyone can worry about the unintended consequences later!

We have direction, a time frame and the Treasurer's support to cease payments without first comprehensively assessing the full impact of doing so.
This is simply unacceptable on every level.
It is now abundantly clear, the obsession to see this through without appropriate analysis is about political expediency and ASIC's ideology.
Every single legislative change should be in relation to delivering a real world benefit to the consumer and this is simply not the case in many instances.
This is much more about removing remuneration to advisers first and foremost because ASIC just cannot accept the fact that in a period of transition there will be a legacy of existing business that will continue to decrease through natural process or deliberate transfer based on client benefit.
This is the second instance following the LIF triggered by ASIC's 413 Report that has been driven by an agenda rather than facts.
The recent disaster which was Protecting Your Super legislation was so poorly constructed we now have hundreds of thousands of superannuation members who have inadvertently lost insurance cover they wished to retain and needed because they did not choose to respond and Opt In.
This is because this legislation should have always been based on an Opt-Out structure so that members were clearly notified in relation to their current insurance and associated costs and then had to opt out if they did not wish to continue.
This way, members who inadvertently or mistakenly did not respond for various reasons would have still been protected.
How on earth can these processes continue to be accepted by Govt without adequate justification to do so ?
Because the facts get in the way of the agenda and political points.

ASIC keep your nose out of what we do!!
We know what we are doing
The client will be poorer for not allowing grandfathering of commissions
Care about customers!!
Continue grandfathering

I am absolutely disgusted! The only thing that keeps us advisers from being a profession (like the doctors, pharmacists, accountants etc) is the fact that we can't come together and defend ourselves from this type of tyranny!!

Stand up everyone and let's have a WIN for a change!! Support the ARC High Court Challenge https://arcfund.com.au/

Financial Planning will never be a profession
Financial Planners do not have the brains to unite
Your representative body the FPA has sold you out and acted more in its own interest instead of its members but financial planners keep backing FPA
Financial Planners can get their qualifications with very little education. They have poor reputation with Australian public and renowned for being dishonest and acting in their own interest and not in their clients interest like other professions. It is laughable that you consider financial planning like doctors and pharmacists. Financial Planners steal and make people sick while doctors heal and cure even from the results of depression and poor health caused by poor financial advice. Accountants know about tax and some aspects of Financial Planning. Financial Planners should be relegated to the dustbin of history and be replaced with the true professionals in customers financial lives the Accountant I believe in 10 years financial planners will be just an unpleasant memory. You can keep dreaming Robert12 but delusion does not become reality. I look forward to the new world when the Australian consumer will see their accountant for professional advice in the clients best interest. You can resist the future but Accountants will be the new professionals of advice in the future. It is not a surprise financial planners are nbot regarded as a profession and never will. Accountants are regarded as professionals now so why trust your retirement and security to anyone but the current professionals Accountants. It is flattering financial planners would like to be accountants but the sad reality is this will never be the case. Like Dr King you can have a dream and try to become an accountant. Keep reaching for the skies

Haha OK sure thing, I'll do a $1,800 CertIV and can become a registered accountant as well as holding my own AFSL, being a registered Tax Practitioner and providing investment advice. The day an accountant can analyse a portfolio and tell me what R Squared, Sharpe Ratios and standard deviation mean I'll stand down. The last thing you should want is a Financial Planner, who has interpersonal skills and the deep trust of their clients, entering your industry. You guys would be wiped out! As it is we offer tax advice on structures, entities and retirement planning. I'll pay an entry level accountant $45k a year to do the compliance work and be on my merry way. Your job is about to be automated, and good luck selling 'advisory' to a tradie that already hates paying your bill to lodge a BAS and reconcile 10 items on Xero.

Felix you are so busy throwing stones you do not realise automation may come to accounting but automation is already here in financial planning - Robo Advice!!!
The difference is Accountants make a difference while Financial Planners do not. The Australian public do not trust Financial Planners but trust Accountants. Clients always want to have accountant look over proposal but not Financial Planner. We the Accountants hold the keys
Accountants are professionals and regarded as a profession which is something that only financial planners can dream of. Your example of a tradie is flawed because tradies hate financial planners with a passion that is why they ask accountants to look over proposals. In relation to your comments they are incorrect. I think you should consult the TPB. Felix experience a reality and become an Accountant and be a true professional instead of a financial planner who aspires to be a wannabe professional

Consult the most recent Professional Planner poll on Robo Advice - it's dud, people don't want to make life choices with a robot. You keep your tradies ITR's, I'll keep my wealthy retirees thanks. Oh and I have consulted the TPB, 3 months and I can hang out my shingle churning returns, that's embarrassing. The barrier to entry to become an accountant is so pitifully low you don't even need a Bachelor's Degree, just a tafe course and away you go! Sit down junior, you've embarrassed yourself enough as it is.

Felix you have misrepresenting the facts.
You can not just do a tafe course and after 3 months be able to do tax returns as your own business.
You should check TPB guidelines again. If you can not read and interpret ring TPB ring them and ask them.
I pity people whom have sought your advice if you can not even get a basic interpretation of tpb requirements.
I suppose I should not be surprised Felix with your cut and paste advise devoid of any rationale and a knowledge obtained by getting people on airtasker to do your cpd points. If you put yourself up as a representative of financial planners and financial planning industry then all financial planners and financial planning industry will be confined to the dustbin of history. I think you are so aggressive as I have hit your fear that you will be replaced by robo advice. Millennials are using technology. You hate tradies. It sounds like you have the same floored business model like Retireinvest. You get retirees but have the inability to engage beneficiaries of estate so you have a dying business long term. Accountants do not churn but financial planners do and this was demonstrated by royal commission

I think the reason you keep replying is you know your role is about to be redundant very shortly, and you have some deep seated desire to be a financial adviser which is why you are reading our industry press. My business model is just fine thanks, but good luck flogging ITR’s in the middle of a shopping centre. And may I suggest you do some reading of your own, the threshold to get a PPC is laughable at best and dangerous at worst. Is it any wonder accountants are being banned and jailed all over the countryside.

Felix you ignorance about accountants and what they do is beyond belief. Accountancy is more then tax returns
Your comments reflect you substandard research and to make it up as it goes even if it is incorrect. You are unable to advise what is required to be an accountant and be able to do tax returns under your own business as you have no idea. Like the advice you give your clients it lacks facts and research. Great recipe for acting in your clients interest. You are happy with your business model of providing poor advice at best or totally providing incorrect information as the basis of your advice.I have never done its in shopping centres but I ask you the question Felix do you conduct business within the anti hawking provisions or do you annoy people at home with your telemarketing calls when they are sitting for dinner?
It is substantially easier to be a financial planner then an Accountant. Accountants have more requirements unlike what you did Felix by you completing an online multiple choice open book Kaplan course which you probably did not have the intelligence or intellect to complete so you needed to use someone on airtasker just like how you maintain cpd points. No wonder you know nothing. Financial Planners like you are what is killing financial planning industry. and why the australian public hates financial planners and you will never be a profession. I look forward to the day when the real financial professionals Accountants put trust and professionalism back into financial planning

Ha, very funny! I have dealt with many accountants like yourself over 20 years as a specialist business adviser working in corporate and sme banking. The most common problem we encountered with 80% to 85% of all business clients we spoke to was their accountant "churned" them into a SMSF. Years later the client was still sitting in a cash account BUT paying the same accountant yearly for the Tax Return plus Audit fee to one of their mates. Some even lost insurance when moved to SMSF, did the accountant care? Clearly an ethical exercise in the best interest of the...... not the client! Honestly, we saw this continually with hundreds of clients. Dirty little secret in the accounting profession to create extras fees by creating a SMSF so "you can have control of your super" was what they told their client, yet leaving the client worse off in a bank cash account getting no return.

If advisers did even part of this they would be banned. We know the truth about "accountants" like yourself.

Did you forget ROYAL COMMISSION!!!!
What you say about accountants is very rare unlike financial planners dodgy conduct. All exposed by Royal Commission. Financial Planners have no credibility no wonder they are not regarded as professions while accountants are part of professions like doctors, lawyers etc unlike planners grouped with cleaners and garbage collectors!!!!

Go away Troll. Accountants cause far more problems than Financial Planners.

VERY PROFESSIONAL....LOL The Tax Practitioners Board is aggressively targeting 2000 accountants who overclaimed more than $1 billion of work expenses for their clients last year, TPB chairman Ian Klug said. In a stinging address to the Tax Institute, Mr Klug, who took over as Board chairman in January, said 1600 “high risk” tax agents had filed alarmingly high work expenses claims for 2.9 million clients in 2018, with the focus now widened to 2000 agents.
Clients were left exposed by the aggressive claims—like the agent who claimed $40 million in rental losses for clients who could not read English, some of them refugees, most of whom never owned a rental property or even knew what the agent was claiming for them, but who still were left with tax penalties.

Steve that may be so but that is just a few rotten apples unlike financial planning where majority of financial planners act in their own interest. The facts are there remember royal commission?

Note the language being used is now "Grandfathered conflicted remuneration" . Pitty those fools getting grandfathered "conflicted" commissions....that's a big challenge to fight against.

Who are you to take pity on planners like me Amanda The conflicted remuneration and grandfathered commissions are my right
I pity new planners as they will not get these payments and commissions
I gather you only have limited knowledge of financial planning industry
There are 3 levels of financial planners
Independent financial planners the lowest level
Industry super financial planners middle average financial planners and then there are bank financial planners the most professional and highest rated financial planners

Add new comment