The Association of Independently Owned Financial Planners (AIOFP) has approved the formation of a committee to represent the industry’s independent sector, and the committee’s first point of action is to address the grandfathering issue affecting the industry.
In a submission to Treasury, the committee (the ACC) has outlined what is still unclear about grandfathering benefits of advisers – Whether an adviser joining a licensee on or after 1 July 2013 can receive payment from the new licensee under the pass through provisions contained in Regulation 7.7A.16F.
The ACC has suggested that grandfathered benefits are passed on when an adviser transfers from one AFS licensee to another.
“Failure to pass on grandfathered benefits will represent a significant hurdle to adviser movement between dealer groups and disadvantage the institutionally independent market sector,” said the ACC in its submission.
“Restricting the transition of grandfathered benefits restricts adviser transition and will be a restraint of trade.”
However, with the election being called for 7 September, the Government is now in ‘care-taking’ mode and no changes will be able to be made to the legislation until after the election.
Phil Anderson of the AFA has once again urged advisers not to make any movements until the issue is clarified. He said that the AFA may ask ASIC to take a take a no-action approach to advisers who have already moved without being aware of the regulation.