The IOOF has told advisers that in less than 3 months, corporate super commissions on FUM will receive a shake-up.
Wealth Professional received concerned emails along with a statement that advisers received. The statement explained: “IML as Trustee of the IPSSF will be required by law to remove Plan Service Fees for all corporate super members from 1 July 2013…PSFs are prohibited under new superannuation fee rules that apply generally across the super fund and commence 1 July 2013. Under new section 99D of SISA, the cost of advice to employers must not be borne by members…The grandfathering rules for FoFA are not applicable here as this is new super law.”
IOOF said Plan Service Fees would cease from 1 July across the board, regardless of any other remuneration. Advisers have the option to enter into a new arrangement with the Trustee for servicing a corporate super plan, with fees payable based on a percentage per member. Administration commissions will not be paid in addition to the servicing fee, so advisers choosing this option would need to opt out of FoFA grandfathered trail and contribution commissions.
IOOF has been seeking legal advice on section 99D of the SIS Act, which has only been finalised in the past two weeks. Advisers have expressed concern about the 11th hour notification, which could mean a potential loss of up to $100,000 for some firms. According to calculations, funds with $7 million FUM could lose about $25,000 a year.
“Naturally this has significantly blind-sided us at such late notice for a platform we generally have a high regard for,” said one firm. “We are beside ourselves with this potentially devastating and commercially crippling news (a potential loss of close to $100,000) that we thought would be under the grandfathering provisions (as other platforms have adopted).”
IOOF said “advisers who do not choose to take up the servicing option can continue to receive grandfathered trail commissions but no PSFs…As trail commission is embedded in the administration fee and not charged as a separate fee, it is not subject to the same ban as PSFs.”
When Wealth Professional contacted IOOF for comment they said, "As we are still working through the issue internally, we aren’t in a position to comment at the moment."
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