Advisers Hurting Over Grandfathered Commission Ban

Will the ending of grandfathered investment and superannuation commissions have a significant impact on the future viability of your advice business?

  • Yes (69%)
  • No (25%)
  • Not sure (6%)

The response to our latest poll on the implications for advice businesses associated with the banning of grandfathered investment and super commissions has been huge – in engagement, in response numbers and in the result itself.

Any adviser or advice business untouched by the banning of grandfathered investment and super commissions is in the minority. A significant majority of advisers, irrespective of their proposition (risk only, risk focussed, holistic, financial planning only or any other proposition) are clearly impacted, and many feel they are either any easy target (low-hanging fruit) or the victims of unintended consequences, caught up in what – at its foundation – is well-intended legislative change meant to serve the public interest.

…Any adviser or advice business untouched by the banning of grandfathered investment and super commissions is in the minority

But at what cost – unintended or otherwise?

Around seven in ten of the hundreds of advisers who have already voted in our poll have indicated the ending of grandfathered investment and super commissions will have a significant impact on the future viability of their business – and we’re fairly sure they’re not talking about a positive impact.

The overall tone of the comments made by advisers responding either to our report last week (see: ASIC Grilled Over Due Diligence…) or to our poll question report reflect a sense of frustration, helplessness and sometimes anger, towards what many believe to be an injustice. This sense of frustration was magnified last week by our reporting (and that of other industry media) of the seeming lack of due diligence surrounding ASIC’s rationale for supporting a ban on grandfathered investment and super commissions as soon as possible, following the recommendation made by Commissioner Hayne in the final report released in February 2019 (see: Royal Commission Financial Advice Recommendations).

As some of our adviser feedback has suggested, the legislation that will ban grandfathered investment and super commissions has yet to pass the Senate, and there have been calls for last-minute lobbying for what we referred to last week as ‘…pragmatic accommodations to existing arrangements that will allow a smoother transition away from grandfathered investment and super commissions.’

We welcome your (already) fantastic contribution to this discussion, where our poll remains open for another week…

  • Daryl La’ Brooy

    I can’t believe more advisers haven’t been going to see their local federal MP’s about this issue. It appears to me many have just given up or will quietly go away. We need to be more like the CFMMEU about this. People might hate the CFMMEU but they are pretty effective for their members! Only 400 advisers so far have contributed to the AIOFP High Court challenge, why? We need to raise $3 million and so far only $1 million has been raised. Some feedback here as to why advisers aren’t prepared to pay $300 (tax deductible?) for the High Court challenge when so many are impacted would be valuable.

    • Ken

      I think the issue is we need a bigger stage I went to my local member who showed empathy to my cause and said he would look into the situation
      I ran into him only three weeks later he had no idea who I was or what the issue was we discussed
      I think plenty have gone and seen them they just are not interested unless it directly effects them and their personal progress
      Where is our Associations in all this ? Quite as usual ! no one seems to want to “Rock” the boat
      I’m happy to be in the fight who do I send my $300 to for high court action

      • Concerned

        Both myself and another adviser in my electorate, met our local MP about two years ago, each on a different occasion. During my meeting, the MP began to see things more clearly and I discovered the same from the other adviser who met with him. We subsequently discovered that he had so much on his plate and our concerns were among a ton of others he was attempting to deal with. I’ve said this before and will state it again – senior managers from the Life Companies, the AFA (forget the FPA – their performance throughout this is not commendable), and the heads of the dealer groups, all need to go to the govt collectively. Individual efforts may have some merit, but a group representing the entire industry, I think, is about the only recourse that exists to help the govt see the truth about what has happened and what will happen if these changes continue.

        • Daryl La’ Brooy

          I have said repeatedly to senior people at the FPA/AFA they should take a leaf out of the books of the AMA, Pharmacy Guild and Accounting bodies on how they lobby governments, liaise with them if needed, to ensure we get a better outcome. Our lobbying to date hasn’t worked and it needs to be improved drastically. We improve the lives of more than 2 million Australians every year along with their families, surely this counts for something?

          • Concerned

            Touche!

      • Jon van Omme

        I am unable to place links in the comments but please search the ADVISER REVENUE CHALLENGE [ARC] fund for information.

        The ARC CHALLENGE FUND is all about the Financial Advice Community coming together and taking a stand against the unfair treatment Financial Advisers have endured over the past decade.

  • alex

    If you seriously think your local MP is going to care, think again. I tried. Epic fail on all occasions. Our concerns are of no benefit to them. They have their own agenda.
    Even if you raise the ever increasing rate of suicides financial planners are committing, you will get the cold shoulder from our federal politicians. This tells us everything.