Grandfathering: ACC’s first initiative

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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.

  • Craig Yates on 6/08/2013 10:00:37 AM

    Policy on the run, unintended consequences of poor and misguided policy and now restrictive trade controlling the movement of advisers between AFSL's is simply deplorable.
    Without wanting to sound too melodramatic, it is clearly obvious the Labor Government in association with the Industry Super Network, would be more than pleased to attempt to destroy the businesses of independent financial advisers across the country.
    In addition, the control and weight of the banking sector owned financial services organisations that have feet in every camp will continue to exert immense influence and will side with any faction that will contribute to maximise shareholder profit.
    How the best interest duty principle can possibly be upheld with employee advisers incentivised to recommend their employers direct or badged products is an interesting question indeed.
    John Brogden is the puppet and the FSC the puppeteer. The independent adviser is now being compromised at every corner.

  • PETER CORRIE on 5/08/2013 6:17:35 PM

    Another example that the Labor government doesn't know what it should be doing.
    However let's hope that commonsense will prevail after the election.

  • jason on 5/08/2013 4:51:51 PM

    Please anyone reading this make the right decision and remove this government, they have picked fights with every sector and almost but destroyed small business

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