ASIC deputy chair Peter Kell has conceded that the grandfathering of commissions is not at all in the interests of consumers, and a “policy level” solution is required to fix the problem.
Appearing before the royal commission, ASIC deputy chair Peter Kell has admitted ASIC should have given more thought to the consequences of the grandfathering provisions.
"Leaving aside the legal side, grandfathering – the entire provision – is not in the interests of consumers," Mr Kell said, responding to a question from counsel assisting Michael Hodge.
"The Parliament has in effect put in place a provision that enables the continuing payment of commission that generate conflicts of interest and unnecessary costs widely across the financial system.
"It was depicted as a transition issue of a relatively modest or limited nature.
"It’s actually an extremely expansive provision both in terms of the circumstances under which grandfathering may continue and the time period over which it may continue into the future.
"We can and should look at individual cases, but I think in the interest of consumers as a whole, it would be highly desirable to have this dealt with at a policy level."
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