Is the gravy train ending for Financial Planners?

I will be Chairing a breakout session  titled “The new AFSL: How to Price your advice” presented by Mr Greg Hayes FCPA and director of Hayes Knight (NSW) Pty Ltd to navigate this technical minefield set to change from 1st July 2014.

Does this spell the end of old style trailing commissions structures? We will find out at 2.30pm today.

Indeed, fee structures and AFSL (or Australian Financial Services Licenses)  crosses many jurisdictions and is an area desperately trying to rid itself of the nasty public image as a result of some unscrupulous financial planning sales techniques in various areas of this largely unregulated industry.

An example of this can be seen in a recent 4 corners episode about the CBA selling culture  taking customers out of safe harbours into higher risk new products.

Far removed from the 4 corners story referenced above, Greg Hayes has a history of ethically growing accounting and financial services practices and been involved with CPA Australia for 20 years. He has held many business related leadership roles from Small Business, Public Practice, Tax and contributed to the Public CPA Practice Programs and CPA Succession Planning Guide.

In late 2013 Greg moved Hayes Knight NSW together with the financial services business (Merit Wealth) and market leading practice support company (Knowledge Shop) to ASX listing with Eaton Investments Limited. If you have any questions you want to ask him remotely please post them before 2pm to have them responded to during the session.

I have put together some quick links to materials I used when preparing for this session for your ease of reference because this is a technical subject to cover.
At a glance:

  • Change to regulations for advising by holders of an Australian financial Services Licensees (AFSL).
  • Effective from 1st July 2014.
  • Most notable area of change is around “conflicted remuneration” or providing unbiased advice.
  • Main objective is to regulate industry and protect consumers but fears it will place greater compliance .
  • Involves interplay between Future of Financial Advice (FoFA) and Tax Agents Services Act 2009 (TASA).
  • Impacts how practitioners derive remuneration but also their employees where paid on performance.
  • No new Grandfathering arrangements after the effective date.
  • Civil penalties and administration sanctions in place of criminal penalties.
  • Ban on platform operators accepting volume based shelf fees from a fund manager.

Reference reading:

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