The Fold managing director Claire Wivell Plater said advisers wanting to leave their existing licensees would lose all grandfathered trail commissions.
“I can’t see how advisers whose trail commissions are a significant part of their income could afford to wear that loss,” she said.
“Which means they will be forced to stay where they are – even if they’re not being well supported by their licensee, or worse still are in dispute with them.”
Ms Wivell Plater suggested the government should reinstate the grandfathering provisions, calling it a “win/win/win situation”.
“It’s a win for advisers because they will not lose a revenue stream they earned under the prevailing rules of the day,” she said
“It’s ultimately a win for licensees because it will allow each to compete on its own merits in the battle to attract advisers.
“It’s also a win for industry sustainability because it avoids wiping significant value off adviser businesses with the stroke of a parliamentary pen.”
Ms Wivell Plater’s warnings were echoed by Synchron director Don Trapnell, who issued a statement suggesting the disallowance motion amounted to “restraint of trade” for the financial advice industry.
“A whole sector of Australian small business will be restricted in their ability to choose a means of distribution that is in line with their culture and their business model,” he said.
Consumers were also likely to suffer as advisers shift the cost of lost commissions to their clients, Mr Trapnell predicted.
“Even if advisers bite the bullet and change licensees anyway, they will then be forced to charge their clients an ongoing fee for service,” he said.
Somethings drastically wrong if a little PUP who represents one of the highest unemployed areas of the nation can dictate and adversely affect the grandfather and future income of THOUSANDS of qualified dedicated ADVISERS also MILLIONS of Australians who are already notably underinsured.
Melinda I have spoken to my industry body- result nothing – I quote “that common sense should prevail” Yeah right. Spoken with Lawyers – no one seems interested in returning calls. We need a collective voice. I am more than happy to speak with anyone wanting to take action. I am sick of waiting for the industry groups to help. They have too many vested interests and only seem interested in lobbying government which has got us NO where.
[quote name=”Not Happy Jan”]So who is going to take a stand. I think it will be a long long wait if we are waiting on an industry body to show how unfair this legislation is. Never has a clear and simple campaign been taken to the public. This is what the politicans care about. Votes.[/quote]
I am going to take a stand, watch this space!
Am I missing something here or can these advisers not change from trail to ASF when they review their clients. I know some clients will have older products where trail is paid and can’t be moved but surely there arent many of these clients?
What I simply don’t understand through the latest Senate debacle is that no industry body purporting to represent advisers has sought to separate product failures (such as Timbercorp, Great Southern and Westpoint) from advice failures.
It was the testimony from the inquiry into the Timbercorp collapse that supposedly swung the two muppets into supporting the disallowance motion.
Even though many people who were ‘advised’ to purchase these products saw an accountant (not a financial adviser) – who are not subject to the FOFA laws (not that their exemption to provide financial advice has been revoked).
I provided advice to some clients, who fit the risk profile, to invest in Agri-business schemes to offset CGT and/or PAYG tax. These products, at that time, had been (supposedly) vetted by ASIC, the ATO, Research Houses and Dealer Groups who added them onto adviser’s APLs.
Yet when these schemes collapsed it’s only the advisers copping the fallout?
So who is going to take a stand. I think it will be a long long wait if we are waiting on an industry body to show how unfair this legislation is. Never has a clear and simple campaign been taken to the public. This is what the politicans care about. Votes.