Government to outlaw grandfathered commissions

The ruling follows from a recommendation of the Hayne royal commission to end the payment of grandfathered commissions.

The Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Bill 2019 will mandate grandfathered commissions are expelled by 1 January 2021.

The bill will also include the founding of a scheme that will make businesses still paying conflicted remuneration after after 1 January 2021 rebate clients for any remuneration paid.

The Treasury said the government has commissioned ASIC to monitor and report on the extent to which product issuers are acting to end the grandfathering of conflicted remuneration.

A statement from Treasurer Josh Frydenberg said the reform will benefit consumers, as “they will receive higher quality advice and stop paying higher fees to fund grandfathered conflicted remuneration”.