This week, Netwealth released its first-half profit results, posting an underlying NPAT of $17 million for the six months to 31 December 2018, up 21 per cent on the prior corresponding period.
In its trading update, the group said that it believes that “many of the recommendations of the royal commission will lead to further growth of our core business”.
Netwealth said the phasing out of grandfathered commissions is expected to be a positive impetus for growth.
“The estimated potential industry-wide FUA subject to grandfathered commission was $189 billion, at June 2018,” the company said.
“The removal of grandfathered commissions is likely to result in greater transitions of legacy business which will benefit Netwealth.”
The company said that less than 3.5 per cent of its FUA is subject to grandfathered commission and the removal of grandfathered commission will not negatively impact Netwealth’s net revenue. As a result of disposing of its advice businesses in 2017–18, Netwealth has no residual liabilities in respect of advice.
The company believes it is well placed to provide functionality to support the increased compliance and regulatory requirements for licensees and advisers and sees opportunities in the royal commission’s recommendations for the superannuation industry.
“The royal commission recommends that superannuation fund trustees should act in no other capacity,” the company said.
“Subject to the form of amending legislation and regulatory approval, we intend to establish a wholly-owned subsidiary as the trustee of the Netwealth Superannuation Master Fund in place of Netwealth Investments Limited.”
Netwealth confirmed that the new trustee company will require $5 million of regulatory capital, which will be funded by existing cash holdings.
Hey Netwealth, if you can get the rules altered so that people can move their allocated pensions without losing the deeming grandfathering then I’ve got about $250m I would love to move out of AMP and into Netwealth. Get on it.
What happens to all the clients pensions that will lose their grandfathered pensions when they move them without advice
The trail commission will be turned off but they will remain in the product.
Not quite, the RC has recommended that the product providers reduce the fees once grandfathered commission is turned off. Clients are expected to pay lesser product / platform fee in some shape or form…
and, you mean asic is going to enforce the big banks compliance with rebating customers.
mate, they can’t even turn off commissions first, forget about rebating anything. their systems don’t work, they have no control over them. they will have to do it manually.
you think a big fat banking executive turd who is riding on the coat tails of his private high school is going to give a flying f about some small time customer and rebating them $30 per month in fees.
get stuffed, is what they will be thinking. ain’t gonna happen.
hayne lives in fairyland.
remember this, when the independent mortgage brokers and financial advisers are gone, and you find out the big 4 are even bigger and nastier in 5 years when they do another royal commission, you won’t be able to unwind it, and bring the advisers and mortgage brokers back, they will be all gone.
we were keeping them honest.
And as luck would have it, the product provider maintains it net fee. Just luck that.
If the platform is using successor fund rules to close the old account and cease the trail com, then it’s possible the replacement successor account could retain its features for Centrelink purposes. Apparently.