Treasury has released draft exposure legislation for consultation to remove the grandfathering arrangements for conflicted remuneration in relation to financial advice provided to retail clients.
Currently, financial advisers may be able to receive conflicted remuneration for providing financial advice to retail clients if the remuneration has been paid under a grandfathering agreement that was entered into before the application day specified in the Corporations Act (generally 1 July 2013). The proposed changes would remove these arrangements effective from 1 January 2021.
This paper also seeks feedback on changes to allow for a scheme where the benefits that would otherwise have been paid as conflicted remuneration after 1 January 2021 to be rebated to affected retail clients. This would be paid by either reducing a payment or reducing a fee.
Submissions on this consultation paper are due by 22 March 2019.
Treasury, Ending Grandfathered Conflicted Remuneration for Financial Advisers, 22 February 2019