Grandfathering fears escalate post-FOFA fiasco
The removal of certainty around grandfathered revenue is an unfortunate consequence of the Senate’s FOFA decision and will see anti-competitive behaviour, says the AFA.
>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.
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