Key elements of the financial services industry, including the Investment and Financial Services Association (IFSA), have been negotiating with the Australian Consumers’ Association in a bid to develop a mutually acceptable product rationalisation formula.
The talks are understood to have found at least some common ground around a formula based on no net detriment to customers as they transition from higher fee legacy products to more up to date arrangements.
IFSA is understood to have outlined the proposed approach in a submission filed with the Government late last month.
In an earlier submission to the Government, IFSA argued that the product rationalisation process carried with it a number of risks, including client concerns about possible loss of benefits and exposure to unforeseen tax consequences.
The submission, filed with the Government last year, said imposing a no detriment effect on the product provider and introducing taxation rollover relief to maintain tax neutrality could address these issues.
