Under the legislation passed through Parliament yesterday, grandfathered conflicted remuneration will be banned from 1 January 2021 and product issuers will be required to rebate the amounts to consumers.
The Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Bill 2019 is in response to a recommendation from the final report of the Hayne royal commission end the payment of grandfathered commissions.
The government has also directed ASIC to monitor and report on the extent to which product issuers are acting to end the grandfathering of conflicted remuneration in the period between 1 July 2019 and 1 January 2021.
The Association of Financial Advisers (AFA) has previously said the grandfathering ban leaves advised clients at risk of being worse off, subject to additional expense and/or losing access to their financial adviser.
“We are deeply disappointed at the lack of analysis on the impacts of this reform and the lack of communication and guidance for impacted clients and advisers. At this stage there will be many thousands of cases where a sensible solution is simply not available,” AFA chief executive Philip Kewin said.
Similarly, the Financial Planning Association of Australia (FPA) has called for the ban on grandfathered commissions to be deferred and re-examined, expressing concern that the bill does not include a thorough enough plan to prevent the cost of advice rocketing.
The FPA said that while it supports the phasing out of commissions on investment products, the legislation has no additional details or steps in place to ensure customers will benefit from the change.
“Removing commissions must result in a genuine reduction in product fees or the rebating of the commissions to consumers, and we haven’t seen details of how the government expects this will work,” said FPA chief executive Dante De Gori.
However, the Financial Services Council welcomed the legislation, with chief executive Sally Loane saying the FSC has been consistent in its support for ending grandfathered conflicted payments
“It is encouraging to see the government acting promptly on the royal commission implementation roadmap and delivering on Recommendation 2.4, which is expected to benefit Australian consumers,” Ms Loane said.
“This is consistent with the FSC position of enhancing confidence in a strong, sustainable financial services sector, that serves Australians with integrity.”
[quote=Anonymous]Dear Advisers, why is there only 400 Advisers putting any $ towards fighting this Govt theft of Adviser property ?
Please for the fact to try to stop the bullying by Govt, put a small bit of money into the fight.
http://www.arcfund[/quote%5D%5Bquote=Anonymous%5DDear Advisers, why is there only 400 Advisers putting any $ towards fighting this Govt theft of Adviser property ?
Please for the fact to try to stop the bullying by Govt, put a small bit of money into the fight.
http://www.arcfund[/quote%5D
Not a chance mate, sorry. Don’t support the team that’s running the show.
Very misguided. Read the website.
[i]Dear Advisers, why is there only 400 Advisers putting any $ towards fighting this Govt theft of Adviser property ? Please for the fact to try to stop the bullying by Govt, put a small bit of money into the fight. http://www.arcfund[/i%5D%5Bi%5D%5B/i%5D%5Bi%5D%5B/i%5D%5Bi%5D%5B/i%5D
Why would we, it will do nothing but line the pockets the same way FPA AFA AOIFP etc etc etc.
Dear Advisers, why is there only 400 Advisers putting any $ towards fighting this Govt theft of Adviser property ?
Please for the fact to try to stop the bullying by Govt, put a small bit of money into the fight.
http://www.arcfund
Annoymous replied to Steve saying ” You know, the majority of FPA and FSC submissions to Gov is content provided by financial advisers and their DGs compliance staff! You should try it one day, you had a lot to say”
The majority of submissions to Treasury submitted by the FPA are not made by planners, but paid advertisements cut and pasted by instructions sent through by their puppet Masters AMP and CBA et al. I’ve made five submissions to FASEA and countless other advisers also wrote. Thankfully FASEA listened to all of those submissions and original policy was watered down. FPA submission in regards to the word “independance” was four lines. The FPA didn’t even ask for submissions. FPA submission to FASEA recommended a Bachelor of Commerce be worth 20 points out of 100. $@%@ your $#$ comments about FPA submissions.
i am willing to put $10k together. and sell a kidney.
no need, just support http://www.arcfund with $300 and spread the word
Reading many of the responseshere, King Canute comes to mind…
So I guess this means industry funds need to stop taking funds from their admin fees to pay advisers wages.
[quote=Anonymous]FSC – Focus on keeping the banks in line you morons….leave the poor planner alone.[/quote] ‘poor planner’. There’s big risk and wealth principles out there making $1m a year with only a high school certificate, DFP, whichever is higher.
Won’t be higher costs to clients. That comes from the compliance burden.
[quote=Ben ]I think many support the abolition of commissions where there is a direct benefit to the client to do so, but what I do not support is a Government that introduces legislation before they have even researched or understood the outcomes and practicality of their own legislation. The Royal Commission was a prime example of this, where you had a retired high court judge that based his recommendations purely from a judicial perspective and a Government that announces that it will support all of Commissioner Hayne’s recommendations before it has even examined or understood his recommendations and the ramifications of same. It’s no wonder Canberra is viewed as such a joke, where we have the appeasement of the public and the ideology that supports it, put ahead of what is right or wrong. History will be the ultimate judge if this is right or wrong and commission vs fee, professional vs unprofessional debate aside, I would say that those clients that need advice the most will be the ones most impacted by this, especially when they seek the ‘shelter’ of an industry super fund and quickly realise that advice is an additional extra they have to pay for. [/quote]
They pay for it anyway, what’s your point? Commission only clients don’t get advice. Many major players are all rebating commissions back to clients account cfs, mlc anz etc.
[quote=Steve]The FPA and the AFA are AN ABSOLUTE JOKE.
These two useless industry bodies have drained you of fees and countless hours or should I say countless days of pointless compliance via ridiculous SOA’s, ROA’s and all their other BS they have invented over the years to justify their existence and ramp up their fees and course flogging.
The end result is directors and ceo’s Have made MILLIONS of dollars for themselves personally and the FPA has pocketed and banked tens of millions in fat profits costing you the adviser dearly.
If these clowns and they are clowns, really cared and were a real u dusty body they would of championed a rally to fix this ridiculously red taped industry and saved it from destruction.
Instead they aimed for fees and course flogging. They won, you lost and people needing advice have paid dearly.
Financial planning is now an industry in ruin. Anyone entering clearly has no idea what they are getting into. Existing advisers have no choice but to river dance their way through the circus and pretend they like what is happening but deep down they too know their days are numbered as the complexity of the industry (the advice thing is simple) and onerous compliance will kill them too in time.
What to do then?
Simple. Sack the FPA, sack the AFA. Stop paying them to rape you. Stop paying them to ruin your life. Watch these clowns get what they deserve and send them bankrupt.
Start you own body from scratch. Delete these compliance mafia clowns from your life.
F off FPA you good for nothing red tape masters.[/quote][quote=Steve]The FPA and the AFA are AN ABSOLUTE JOKE.
These two useless industry bodies have drained you of fees and countless hours or should I say countless days of pointless compliance via ridiculous SOA’s, ROA’s and all their other BS they have invented over the years to justify their existence and ramp up their fees and course flogging.
The end result is directors and ceo’s Have made MILLIONS of dollars for themselves personally and the FPA has pocketed and banked tens of millions in fat profits costing you the adviser dearly.
If these clowns and they are clowns, really cared and were a real u dusty body they would of championed a rally to fix this ridiculously red taped industry and saved it from destruction.
Instead they aimed for fees and course flogging. They won, you lost and people needing advice have paid dearly.
Financial planning is now an industry in ruin. Anyone entering clearly has no idea what they are getting into. Existing advisers have no choice but to river dance their way through the circus and pretend they like what is happening but deep down they too know their days are numbered as the complexity of the industry (the advice thing is simple) and onerous compliance will kill them too in time.
What to do then?
Simple. Sack the FPA, sack the AFA. Stop paying them to rape you. Stop paying them to ruin your life. Watch these clowns get what they deserve and send them bankrupt.
Start you own body from scratch. Delete these compliance mafia clowns from your life.
F off FPA you good for nothing red tape masters.[/quote]
Would have thought AFA we al are not for profit? Pretty sure their ceos aren’t on millions either . Don’t let the truth get in the way of your rant.
Love to see your greed is good Industry Body. Pretty sure you never contributed to any submission any of those organisations made. You know, the majority of FPA and FSC submissions to Gov is content provided by financial advisers and their DGs compliance staff! You should try it one day, you had a lot to say.
[quote=Steve]The FPA and the AFA are AN ABSOLUTE JOKE.
These two useless industry bodies have drained you of fees and countless hours or should I say countless days of pointless compliance via ridiculous SOA’s, ROA’s and all their other BS they have invented over the years to justify their existence and ramp up their fees and course flogging.
The end result is directors and ceo’s Have made MILLIONS of dollars for themselves personally and the FPA has pocketed and banked tens of millions in fat profits costing you the adviser dearly.
If these clowns and they are clowns, really cared and were a real u dusty body they would of championed a rally to fix this ridiculously red taped industry and saved it from destruction.
Instead they aimed for fees and course flogging. They won, you lost and people needing advice have paid dearly.
Financial planning is now an industry in ruin. Anyone entering clearly has no idea what they are getting into. Existing advisers have no choice but to river dance their way through the circus and pretend they like what is happening but deep down they too know their days are numbered as the complexity of the industry (the advice thing is simple) and onerous compliance will kill them too in time.
What to do then?
Simple. Sack the FPA, sack the AFA. Stop paying them to rape you. Stop paying them to ruin your life. Watch these clowns get what they deserve and send them bankrupt.
Start you own body from scratch. Delete these compliance mafia clowns from your life.
F off FPA you good for nothing red tape masters.[/quote][quote=Steve]The FPA and the AFA are AN ABSOLUTE JOKE.
These two useless industry bodies have drained you of fees and countless hours or should I say countless days of pointless compliance via ridiculous SOA’s, ROA’s and all their other BS they have invented over the years to justify their existence and ramp up their fees and course flogging.
The end result is directors and ceo’s Have made MILLIONS of dollars for themselves personally and the FPA has pocketed and banked tens of millions in fat profits costing you the adviser dearly.
If these clowns and they are clowns, really cared and were a real u dusty body they would of championed a rally to fix this ridiculously red taped industry and saved it from destruction.
Instead they aimed for fees and course flogging. They won, you lost and people needing advice have paid dearly.
Financial planning is now an industry in ruin. Anyone entering clearly has no idea what they are getting into. Existing advisers have no choice but to river dance their way through the circus and pretend they like what is happening but deep down they too know their days are numbered as the complexity of the industry (the advice thing is simple) and onerous compliance will kill them too in time.
What to do then?
Simple. Sack the FPA, sack the AFA. Stop paying them to rape you. Stop paying them to ruin your life. Watch these clowns get what they deserve and send them bankrupt.
Start you own body from scratch. Delete these compliance mafia clowns from your life.
F off FPA you good for nothing red tape masters.[/quote]
Sure start your own Body. Now clients are really screwed.
I fully expect individuals such as Sally Loone and the FSC to be held to account if there are any adverse impacts on clients that result from this…..oh sorry of course that wont happen, it will be the fault of the advisers! On a serious note if there was individual accountability in Canberra, matters would be fully researched before legislated, thats for sure!
We as an industry must stand up and oppose this abuse of power, as demonstrated on many occasions over the past 6 years, the High Court will be the only place we can get justice.
Even the AFA have come out and said this legislation will impact even those advisers who have NO GF Revenue!
Join the ARC Challenge fund and support all advisers!
Go to the link
https://arcfund.com.au/
[quote=Anonymous]Let’s see No Win No Fee become mandatory for lawyers. If the Rowena Orr types lose their client’s case in court, they get paid nothing, even if they have been working on the case for months. Also if they do win but the other side then appeals, a clawback would apply where they have to pay their fees back to the client.
Once the lawyers are under this approach, we won’t have politicians (many of who are former lawyers) constantly tampering with our remuneration model, because they will get the reality check they seriously need. [/quote][quote=Anonymous]Let’s see No Win No Fee become mandatory for lawyers. If the Rowena Orr types lose their client’s case in court, they get paid nothing, even if they have been working on the case for months. Also if they do win but the other side then appeals, a clawback would apply where they have to pay their fees back to the client.
Once the lawyers are under this approach, we won’t have politicians (many of who are former lawyers) constantly tampering with our remuneration model, because they will get the reality check they seriously need. [/quote]
excellent. what does it take for us all to unite to make this a reality. a living nightmare for lawyers.
i am willing to put $10k together. and sell a kidney.
Let’s see No Win No Fee become mandatory for lawyers. If the Rowena Orr types lose their client’s case in court, they get paid nothing, even if they have been working on the case for months. Also if they do win but the other side then appeals, a clawback would apply where they have to pay their fees back to the client.
Once the lawyers are under this approach, we won’t have politicians (many of who are former lawyers) constantly tampering with our remuneration model, because they will get the reality check they seriously need.
[quote=Captain Obvious ]Now watch a cap placed on adviser service fees paid from Super. Do you people think it will stop at this ?[/quote][quote=Captain Obvious ]Now watch a cap placed on adviser service fees paid from Super. Do you people think it will stop at this ?[/quote]
Most retail platforms already have a cap on the fee that can be charged via superannuation as it is, and placing a cap on how much we can charge for our fee is basically cartel or state-sanctioned monopolistic behaviour. That would have a serious constitutional challenge attached to it.
A total utter oxygen thief, nothing less.
Finally…. I can get rid of those “handful” of widowed elderly Grandmothers that are in grandfathered account based pensions, that phoned me every 9-12 months to tell me that their grandson farted for the first time. You know the ones… you only formally review say every say 2 years, but you provide holistic advice to them on everything from Age pension, to Wills & Estate Planning, cashflow check, franking credits, a Social Security checkup, acting as a some type of safety net between them and the greedy kids, you do all that for a measly $400 to $900 . Now I have a very very valid reason to say goodbye and spending this charity time doing actual charity work. I’m actually looking forward to it….. I guess however for some the whole dealer group fees up, closing up shop and or moving to AMP is a bit of a debbie downer but.
Well Sally Loane, lets look at the “benefit to customers” since the FSC conned the government into the LIF by not providing correct lapse data until after it was passed.
ALL of your members since the LIF have been increasing premiums for existing customers. As many as 3/4 times and as much as 25% each time. Your members say this is because of “claims experience” every time they increase rates.
BUT
Your members are somehow able to discount premiums for the very same products JUST for new business. Apparently NEW customers can have discounts and the claims experience will be miraculously different??
Lets face it your members are robbing existing customers for profit, they are increasing lapses and trying to encourage churn. An issue that was not a problem before the LIF.
The FSC are a disgusting organisation that should be shut down.
I’m a risk-only adviser so this announcement doesn’t affect me personally but I can’t say I’m that impressed with the [b]self-righteous advisers[/b][b][/b] here saying how great it is for the industry moving forward and that it’s bad luck for the advisers who bought books that were based on the recurring income.
Some of these advisers are probably going to lose their homes. I don’t see how that’s good for the industry – or the advisers.
Again too though…major decisions being made by politicians who don’t fully comprehend the magnitude of what they’ve done – who won’t around to face the consequences when it all hits the fan.
[quote=Wayne]Sally Loane is useless. She should have been sacked after the RC.
[/quote]
Long before then Wayne. She should have been sacked after LIF. At least her partner in crime O’Dwyer disappeared after that shameful exercise in anti consumer cartel behaviour based on fabricated “research”.
Now watch a cap placed on adviser service fees paid from Super. Do you people think it will stop at this ?
I don’t have any grandfathered commissions but of course the FSC would welcome the ban. This grub lobby group will now be analysing how they can pass on the least benefit to customers and make the maximum profit out of it.
And as for Sally Loane discussing the Royal Commission, does she think anyone will forget the embarrassing performance on the stand and how the RC showed the FSC up for what they really are? A lobby group with a members code that is never enforced when breached. Nothing more.
For those supporting the removal of Grandfathered Commission payments (now termed conflicted) can you please explain why it OK for a Product Provider (Industry Super etc) to take a slice of the FUM to provide general advice and service and then, deliver this to ONLY those that call to use the service – and how on earth is Advice DIRECTLY from a product provider not conflicted – even if it is only general advice?
The way of the future will see (and already we are seeing the move) product providers using DIRECTLY employed staff who will deliver advice (general I would suggest as this has no compliance and is better method of selling product) directly to the end customer. No conflicts?
Personal Advice – well, the Product Provider can start doing this as they can essentially deliver this at a financial loss as the costs will be covered from the general pool of members who are all paying for advice – with no option to opt out.
So, if you think there will be a bright commercial future for Privately owned Financial Planning Practice, you competition will be the Product Providers who will on all situations be able to deliver the service you offer at a far more affordable price point than that of a Privately Owned Practice – and the Product Provider will not have to worry about being conflicted.
That is how I see reality.
[quote=anon]Jump onboard and defend you incomes…..www.arcfund.com.au
No one else will fight for your rights and your businesses. FFS, this should be a no brainer![/quote]
FFS stands for Fee For Service right?
Thank the heavens this is finally happening!! really sick and tired of so many advisers getting paid for nothing and pretending to deliver service….If you genuinely serviced, and met your clients regularly you would be able to transition them to another fee model and have a business of fee paying clients.
Advisers who are worried about valuations and bought the books recently really only have themselves to blame if they didn’t see this coming.
The FPA and the AFA are AN ABSOLUTE JOKE.
These two useless industry bodies have drained you of fees and countless hours or should I say countless days of pointless compliance via ridiculous SOA’s, ROA’s and all their other BS they have invented over the years to justify their existence and ramp up their fees and course flogging.
The end result is directors and ceo’s Have made MILLIONS of dollars for themselves personally and the FPA has pocketed and banked tens of millions in fat profits costing you the adviser dearly.
If these clowns and they are clowns, really cared and were a real u dusty body they would of championed a rally to fix this ridiculously red taped industry and saved it from destruction.
Instead they aimed for fees and course flogging. They won, you lost and people needing advice have paid dearly.
Financial planning is now an industry in ruin. Anyone entering clearly has no idea what they are getting into. Existing advisers have no choice but to river dance their way through the circus and pretend they like what is happening but deep down they too know their days are numbered as the complexity of the industry (the advice thing is simple) and onerous compliance will kill them too in time.
What to do then?
Simple. Sack the FPA, sack the AFA. Stop paying them to rape you. Stop paying them to ruin your life. Watch these clowns get what they deserve and send them bankrupt.
Start you own body from scratch. Delete these compliance mafia clowns from your life.
F off FPA you good for nothing red tape masters.
I think this is a good thing for the industry long-term. For too long all levels of the industry have talked about what the future could / should be but they, all of them, have been reluctant to take the short-term financial hits. It just took a third party to make the sensible decision for the industry.
There has been more than enough notice that grandfathering would be abolished and hence more than enough time to realign a business to the future. And to be fair, or just honest, if an adviser bought a book of grandfathered revenue did they buy the product holders to turn into quality long-term clients or did they just buy a “no effort” revenue stream. I think the majority of us know what they should have bought it for. So my sympathy level is pretty low.
Almost all of the clients paying an adviser on a grandfathered commission will notice zero change to their service level. The quality of the various types of “remote service” / “robo advice” have dramatically improved and for many clients they are getting a better level of service, control and reliability than any grandfathering commission will deliver.
[quote=Too right]Mytope – 100% agree mate!!!!!![/quote][quote=Too right]Mytope – 100% agree mate!!!!!![/quote][quote=Anne Ominous]The government must compensate advisers for the damage this will cause to business valuations. The grandfathering in 2013 was a commitment by the government of no future changes – that’s why advisers bought books with trails and often borrowed to do so. The compensation money can come from the money the government is collecting from the FASEA exams, or better still, the parliamentary pension fund. [/quote][quote=Anne Ominous]The government must compensate advisers for the damage this will cause to business valuations. The grandfathering in 2013 was a commitment by the government of no future changes – that’s why advisers bought books with trails and often borrowed to do so. The compensation money can come from the money the government is collecting from the FASEA exams, or better still, the parliamentary pension fund. [/quote]
hahaha good one!!
For the bigger picture, FSC is right. How many losing those commissions are not way ahead on the revenue for those individual clients? Its was money for nothing, and may feel unfair that it is going, but it is what it is. what can you do.
As for FPA, AFA, they are flogging a dead horse and just embarrassing themselves..If FPA is worried about sky rocketing advice costs, focus on reducing the COMPLIANCE BURDEN and SOA length. The Compliance costs have rocketing and that directly affects the cost of advice. Not grandfathered commissions for clients who most adviser dont even know their names.
[quote=Anne Ominous]The government must compensate advisers for the damage this will cause to business valuations. The grandfathering in 2013 was a commitment by the government of no future changes – that’s why advisers bought books with trails and often borrowed to do so. The compensation money can come from the money the government is collecting from the FASEA exams, or better still, the parliamentary pension fund. [/quote]
The Value of a business changes all the time. Increased cost, lower revenue, more competition, regulation changes (can impede or benefit revenue). If your valuation is considerably lower, then you need to look at your business model because you adapted to industry changes. Even you have held those clients for more than 4+ years, you are on top financially, so realise you are a ahead. If you recently bought your business, YES agreed it is a harsh change that is partly not fair, but also should have only paid 2x.
Why does the FSC comment – they have mostly divested from the Industry. Who cares what they think.
Ideology reigns supreme
I think many support the abolition of commissions where there is a direct benefit to the client to do so, but what I do not support is a Government that introduces legislation before they have even researched or understood the outcomes and practicality of their own legislation. The Royal Commission was a prime example of this, where you had a retired high court judge that based his recommendations purely from a judicial perspective and a Government that announces that it will support all of Commissioner Hayne’s recommendations before it has even examined or understood his recommendations and the ramifications of same. It’s no wonder Canberra is viewed as such a joke, where we have the appeasement of the public and the ideology that supports it, put ahead of what is right or wrong. History will be the ultimate judge if this is right or wrong and commission vs fee, professional vs unprofessional debate aside, I would say that those clients that need advice the most will be the ones most impacted by this, especially when they seek the ‘shelter’ of an industry super fund and quickly realise that advice is an additional extra they have to pay for.
Sally’s support, probably means it is a really bad idea.
isnt it good that the salaried fat cats can pontificate and legislate on the theory of this ban yet remain totally unaffected by the real result? IE higher cost to clients and lower business values. Idealists, please leave the country… maybe go somewhere like Iran and pontificate there!
Sally Loane is useless. She should have been sacked after the RC.
Now we have a ban on grand fathered commissions and yet politicians will continue rort the system obscenely.
What a crazy world!
No wonder the Australian economy is tanking
So 2.2% fee now drops to 1.8%.. so planners pay for this… so when does the 1.8% fee drop to 1.4%???? Just pathetic
Sally Loane and FSC rhetoric supported by vacuous, empty statements about what is ” expected ” to benefit Australian consumers.
Expectations that are not based on any comprehensive analysis or data.
Unbelievable state of affairs and an agenda driven focus rather than common sense and fairness.
Mytope – 100% agree mate!!!!!!
The government must compensate advisers for the damage this will cause to business valuations. The grandfathering in 2013 was a commitment by the government of no future changes – that’s why advisers bought books with trails and often borrowed to do so. The compensation money can come from the money the government is collecting from the FASEA exams, or better still, the parliamentary pension fund.
FSC states “which is expected to benefit Australian consumers”
we all know that it wont benefit Australian consumers. Existing clients will be turned away because they cannot pay the higher fees and potential new clients will find barriers to finding an adviser through high costs, less advisers and existing advisers closing practices to new clients to deal with the legislation changes and having to meet onerous compliance burdens. This will all result in less time available to meet and service clients.
We have already seen the LIF changes to life insurance which has resulted in increased premiums to clients and more incentive to churn to gain access to premium discounts offered on new business.
Everyone has had plenty of time to change to fee for service- if you were providing a service.
FSC – Focus on keeping the banks in line you morons….leave the poor planner alone.
Wow.. this is a bad move
Jump onboard and defend you incomes…..www.arcfund.com.au
No one else will fight for your rights and your businesses. FFS, this should be a no brainer!