BTFG to Remove Grandfathered Payments

BT Financial Group (BTFG) has removed almost all forms of grandfathered payments paid to salaried advisers operating under the Westpac/BT advice channels.

BTFG Chief Executive Brad Cooper

The change will take effect from 1 October 2018 and will not cover retail life insurance commissions or any advisers operating outside of BT who currently receive grandfathered payments from a BTFG product, however, the latter may request the payments are removed.

In announcing the move, BTFG said it had provided grandfathered payments to advisers in line with the Future of Financial Advice (FoFA) reforms which allowed arrangements in place prior to the commencement of FoFA to continue.

“We have considered this position…and decided that it is the right time to draw a line under these past arrangements…”

“It was generally understood at the time that grandfathering of those arrangements was necessary, at least in part, because legislators could not extinguish existing contractual rights without compensating those impacted by such a change,” BTFG explained, adding that, at present, 140,000 customer accounts were still subject to the payments.

“We have considered this position from both a customer and a stakeholder perspective and decided that it is the right time to draw a line under these past arrangements and eliminate them as far as we are contractually able,” the group stated

BTFG Chief Executive, Brad Cooper customer accounts held in BT superannuation, investment, group insurance and platform products will benefit from the change which were part of ongoing efforts to raise standards.

“Our announcement today builds on prior decisions to stop BT Financial Advisers receiving any benefit from stamping fees (despite being permitted under FoFA), ensuring that all BT Financial Advice ongoing advice customers receive an opt-in notice (not just those who joined after the FoFA reforms commenced as required by FoFA) and giving customers the opportunity to openly provide and review feedback through BT Adviser View,” Cooper said.

  • Paul F

    Well it will be great for clients of salaried advisers as BT will no doubt reduce their premiums by the trail they are no longer paying – Well done BT.
    Or will it just be another nice headline where the adviser gets shafted, the consumer gets nothing and Westpac laughs all the way to the bank. Why don’t we put odds on it and have a bet??

    • Risky Business

      ha ha yeah … what are the odds? It’ll be just like all the other insurers with premium increases of up to 20% in the past 12 months, including Level premiums in the mix – so much for reduced commissions (which I’ve no issue with) affecting insurance premiums in favour of the clients!
      The only winners are the insurers.

  • Where’s The Integrity?

    Doesn’t this decision, and the ones that will no doubt follow from the other sheep banks out there who do the same just dissolve the value of adviser businesses out there? I find this absolutely staggering if that’s the case. This industry is turning to mush….

    • Where’s the loyalty

      Executives like Cooper do not care about adviser businesses and their value. It is all about them. The loyalty that advisers have placed in the institutions that pay these fat cat salaries have never been reciprocated. This will be straw that breaks the camels back. Cooper will need significant support from advisers to create the volume to make his business strategy work. It will fail and then he will move on to some other fat cat role

  • Ken

    To me it’s illegal !!! After 40 years of supporting these companies and reviewing these clients they are going to simply stop an arrangement born in faith all those years ago when we were told it’s is to assist us ( the insurers) in looking after and retaining clients but also to build you a business you can sell and retire from
    What a joke let’s just keep moving the goal posts until there is no retail insurance network
    There were some great minds in the industry in the 80s that were innovative and understood value to the industry and how to maintain it they would be turning in their graves at the sight of this ongoing mess
    Don’t think the clients will get any reprieve from this watch for the next rate increase and grandfather commission cancellations once the financial year is over
    Let’s have a guess At who is next to move