Release of grandfathering submissions reveals positioning
The Federal Treasury has finally made public the submissions it received around consultations regarding the regulatory settings for ending grandfathering with the documents making clear the degree to which the industry, but particularly industry superannuation funds, believed the regime had to be brought to an end.
However, in line with the position put by the Association of Financial Advisers (AFA) and the Financial Planning Association (FPA) there was significant unanimity on the need for any rebated grandfathered commissions to be directed to clients.
However, annuities specialist, Challenger Limited pointed to the technical difficulties in achieving clients received the rebates, particularly the manner in which “a one-off payment would crystallise the taxation and social security implications of redirecting commission payments to customers”.
It said that the intention of the policy proposal was for customers to receive the benefit of previously grandfathered commission payments and that it supported the proposal, but wanted to “ensure that customers do not suffer unintended detriment when the proposal is implemented”.
“It will be important for consumers that treatment of any redirected commission payments does not alter, or adversely impact their eligibility for existing benefits,” it said. “Many of our annuity customers are retirees who may be eligible for certain social security benefits, such as a part pension, health care card or other assistance.”
One of the loudest dissenting voices in the submissions was that of Industry Super Australia (ISA) which wanted an immediate end to grandfathered arrangements and argued that arguments around customer rebates were flawed.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
