A senior Commonwealth Bank wealth executive has spoken out against the unscrupulous recruitment tactics of some dealer groups in the post-FOFA environment.
Addressing a roundtable discussion at this week’s Financial Services Institute of Australasia (Finsia) conference in Sydney, CBA executive general manager of advice Marianne Perkovic said uncertainty over grandfathering was creating inappropriate recruitment activity.
“There are licensees out there looking to entice advisers to their licence by offering transition payments to supplement the lost grandfathered revenue,” Ms Perkovic said.
“We are publicly saying this is not right for the industry or the consumer, and we hope this activity dies in a ditch,” she added.
Rather than focusing on recruitment of practices interested in switching licensees, dealer group managers should be looking to increase the number of total advisers in the industry, the executive said.
“We need to ensure the industry grows – that’s why we are focusing our efforts on bringing strong graduates into the industry,” Ms Perkovic said.
The comments followed a presentation by ASIC senior executive leader, financial advisers, Louise Macaulay indicating the corporate regulator is expecting clarity on grandfathering from the new Abbott government.
“We are hearing concerns about advisers being bound to licensees as they lose the benefits of the grandfathering provision,” Ms Macaulay said.
“Our view on the law as it stands is that where an adviser moves licensee then they will lose those benefits.”
“In terms of trail commissions, when a business is sold, our view is that every sale needs to be looked at individually to view the particular agreement underpinning the sale and I expect to be hearing more about this from our new government.”
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