Government to review removal of stamping fees

Treasury is seeking feedback from consumers and industry stakeholders on the 2020 change which extended the ban on conflicted remuneration to ‘stamping fees’ paid by listed investment companies (LICs) and listed investment trusts (LITs).

Namely, since 1 July 2020, stamping fees paid in respect of LICs and LITs have been treated as conflicted remuneration and have been prohibited under the Corporations Act 2001. 

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Removing conflicted remuneration was implemented to address potentially misaligned incentives between advisers and clients, and to ensure capital markets remained efficient and globally competitive.

In a statement issued on Tuesday, the Treasury explained that because a regulation impact statement had not been completed prior to the final decision in 2020, it is now obliged to complete a post-implementation review of the policy.

Treasury is seeking feedback on:

• the policy’s regulatory impacts on advisers and stockbrokers
• changes to consumers’ investment choices
• competition settings for managed funds, and
• any other unintended consequences in the market.

Submission to the consultation can be made until 10 July 2022. 

The removal of stamping fees was welcomed by advisers back in 2020.

The then CEO of the FPA, Dante De Gori, argued that the fees were primarily paid to stockbrokers rather than financial planners, with most advisers receiving just a fraction of their income from commission-based payments.

“FPA members voted in 2009 to approve the FPA remuneration policy, which required members to move to client directed remuneration models from 2012,” Mr De Gori said at the time.

“Remuneration from commissions on investment products has been trending down for FPA members for many years and now accounts for less than 7 per cent of our members’ remuneration. We are confident this will be close to zero by the end of the year.”