The Australian Securities and Investments Commission (ASIC) has announced its intention to review the industry’s transition process away from grandfathered remuneration for financial advice.
“The investigation, directed by the Treasurer following the government’s commitment to end the practice by 1 January 2021, will review the steps taken by industry participants from 1 July 2019 until the 2021 deadline,” ASIC said.
“ASIC will also investigate any impediments to this transition and the extent to which benefits are being passed on to affected clients.”
The corporate regulator said its review into the progress of ending grandfathered remuneration arrangements for financial advisers would be based on both quantitative and qualitative studies.
“For the quantitative study, ASIC will conduct a survey of entities known to pay grandfathered conflicted remuneration to Australian financial services licensees or their representatives and require them under notice to provide data initially for a 12-month period (from 1 July 2018 to 30 June 2019), and thereafter on a quarterly basis for the review period (for example, reporting for the period from 1 July to 30 September 2019 will be in October 2019),” it said.
“The qualitative review will include a smaller sample of entities that pay and receive grandfathered remuneration. This will involve more detailed engagement and analysis during the review period.”
Analysis of both reviews would be reported to the treasurer by 30 June 2021 and also released publicly, with regular updates provided to the treasurer and industry during the review period, it said.