In a statement, AFA chief executive Brad Fox expressed deep concerns over the removal of the hard-fought for grandfathering regulations, warning that advisers may have greater trouble moving between licensees.
“The disallowance of the government’s FOFA amendments puts a big question mark back over grandfathering,” Mr Fox said.
“This is a revenue stream which was legitimately established in line with the products and laws of the day. It stands to reason that if advisers will now lose this revenue when they move licensees, then they will be forced to stay where they are.”
This situation may lead to “competition failure” within the industry whereby the “small [licensees] will get smaller and the big, bigger”.
However, at the same time, Mr Fox said he believes both sides of politics have this week been making constructive noises on the issue.
“The removal of the grandfathering amendments will reintroduce a roadblock to competition in the advice market, without any demonstrable benefit to consumers and we believe our concerns are shared by both the Government and the Opposition,” he said.
Sterling Publishing will be releasing ground-breaking research on licensee switching in coming weeks. To register your interest email publisher@ifa.com.au
Jan
I totally agree and I have been through the process of converting all to fee for service. A long process with costs and there were some worth while results. my initial comment was based wholly around being in control of business, fees and most of all–being able to select my choice of dealer group without any encumberances, politics or B S !
Dave i get your point and in a perfect world this would happen but there are costs to move and things get harder if its not super with tax etc. If there is no increase in cost to the client if you change licensee’s then where is the comsumer protection and benefit ? Because lets remember this is not about politics its about the consumer !!!! Right
Commissions were always going to be an issue. Those affected need to tackle the issue head on. Sure it will take effort but if all clients are moved to fee for service then the road block is gone and freedom is returned. Easier said than done but the end result is worth it and there will be pleasant surprizes. We need to control our destiny and not leave control to political motivations
Grandfathering helps everyone is aided by more competition. this needs to be tested as to how legally binding this anti-competitive legislation is.
Here here Brad, you are exactly right, it happened prior to the amendments going to the Senate, and it will now commence again, where the Large Licensees will say you are free to move, however your grandfathered revenue will remain with us. This directly affects us as a licensee.