{"id":28527,"date":"2015-01-27T15:45:25","date_gmt":"2015-01-27T04:45:25","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=28527"},"modified":"2015-01-28T07:23:23","modified_gmt":"2015-01-27T20:23:23","slug":"lawyer-provides-clarification-on-grandfathering","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2015\/01\/27\/lawyer-provides-clarification-on-grandfathering\/","title":{"rendered":"Lawyer Provides Clarification on Grandfathering"},"content":{"rendered":"

Financial services legal expert, Claire Wivell-Plater<\/strong>, has confirmed that the new Future of Financial Advice (FoFA) grandfathering regulations do deliver on the Government\u2019s promise to protect advisers\u2019 revenue streams.<\/span><\/p>\n

<\/p>\n

\"Managing<\/a>
Managing Director, The Fold, Claire Wivell-Plater<\/figcaption><\/figure>\n

Following comments received from riskinfo readers on our earlier story (see: FoFA Grandfathering Regulation Made Law<\/a>), we sought further legal clarification on the measures from The Fold<\/a>\u2019s Managing Director, Ms Wivell-Plater.<\/p>\n

First and foremost, Ms Wivell-Plater reminded advisers that commissions for individual risk insurance products are not considered conflicted remuneration, and therefore are not subject to the grandfathering rules (ie: they can continue regardless of any changes to the advice arrangement).<\/p>\n

In relation to conflicted remuneration which is subject to grandfathering (ie: commissions for group life risk policies inside superannuation whether it is for a default or another type of superannuation fund and individual life insurance policies for the benefit of a member of a default fund), Ms Wivell-Plater said advisers can be comforted by the regulations enacted by the Government in late December.<\/p>\n

\u201cThe regulations are absolutely clear that, regardless of whether you change licensee or you sell your practice, as long as the grandfathered arrangement hasn\u2019t changed substantially from when it was first established, it will continue on,\u201d she told riskinfo.<\/p>\n

If a benefit has changed substantially, the arrangement will be deemed a \u2018new arrangement\u2019 and therefore subject to the new FoFA rules. In order for a benefit to be considered to have changed substantially, Ms Wivell-Plater suggested the following are likely to have occurred:<\/p>\n