Financial Planning
Grandfathered commissions ban splits industry: Poll

The proposed removal of grandfathered commissions will have opposing effects on revenue, latest poll results show.

More than half (53%) surveyed by Financial Standard last week said the removal of grandfathering arrangements will have minimal to no impact on the financial viability of their business.

Almost an equal number of respondents (47%) worry one of the key recommendations from the financial services Royal Commission will have either a material or severe impact on revenue.

Commissioner Kenneth Hayne said in his final report said that  there is no justification for grandfathering provisions in an industry that is trying to remove conflicts of interest in remuneration.

"I would bring the grandfathering arrangements made at the time of the Future of Financial Advice (FoFA) reforms to an end. The time for transition has passed," Hayne said.

"Advisers have an incentive to keep their clients in products with grandfathered commissions rather than advise them to move to better products. There can be, and is, no justification for maintaining the grandfathering provisions."

Treasurer Josh Frydenberg reaffirmed grandfathered commissions will be banned as of 1 January 2021.

To ensure the benefits of industry renegotiating current arrangements to remove grandfathered remuneration flow through to clients, Frydenberg said ASIC will monitor and report on the extent to which product issuers are acting to end the grandfathering for the period 1 July 2019 to 1 January 2021.

Financial Standard's new poll asks about the current state of merger activities in superannuation - and if more consolidation should take place.

Read more: Financial StandardKenneth HayneJosh FrydenbergASICFuture of Financial AdviceRoyal Commission
Link to something j6MgF3Pk