You web browser may not be properly supported. To use this site and all its features we recommend using the latest versions of Chrome, Safari or Firefox

Finance Planning People Documents Resized

Following the Financial Services Royal Commission, the Australian Government is acting to change the laws surrounding grandfathered conflicted remuneration on superannuation, investment and insurance products.

Conflicted remuneration is a monetary or non-monetary commission given to a financial advisor or planner which is likely to influence the product advice or recommendations they provide to clients.

The Government passed reforms five years ago to ban conflicted remuneration, however kickbacks paid on ‘grandfathered’ accounts - set up prior to 1 July 2013 - were still allowed. Clients may be unaware they are paying these kickbacks because they are usually built into their total account fees. The Government has rightly concluded that the continued payment of these commissions is eroding the superannuation savings of Australians.

The problem with grandfathered conflicted remuneration is that it removes any incentive for financial advisors to find the best product for their clients. Instead, financial advisors may be inclined to keep their clients’ money in existing products instead of moving them into better-suited products because the move might result in lower commissions. Essentially, financial advisors and planners may be inclined to place their own financial interests above the client’s best interests.

However, this is set to change as new laws to extend the current ban on conflicted remuneration to include grandfathered commissions are being passed in Parliament. Financial advisors, planners and product issuers will have until 1 January 2021 to modify their business practices in order to comply with the new laws.

How we can help you

If you are involved in a dispute with a financial adviser or planner, Slater and Gordon can help you by:

  • Providing you with advice about your rights as a client
  • Assisting you to negotiate a resolution to your financial dispute
  • Representing you in any legal proceedings

You can learn more about our commercial litigation services here, or if you have an enquiry about a financial dispute, you can submit an online enquiry below.

The contents of this blog post are considered accurate as at the date of publication. However the applicable laws may be subject to change, thereby affecting the accuracy of the article. The information contained in this blog post is of a general nature only and is not specific to anyone’s personal circumstances. Please seek legal advice before acting on any of the information contained in this post.

Thank you for your feedback.

We're here to help

Start your online claim check now. Or, if you have a question, get in touch with our team.

Latest blog posts

Professional Negligence
Consumers set to gain further protection in insurance contracts

The Australian Government is preparing to make sweeping changes to the insurance industry to create greater protections for consumers. To date, insurers have seemingly held all the power, and use a take-it-or-leave-it approach to their contracts when dealing with potential customers. Consumers and small businesses have been powerless in being able negotiate their insurance contracts. This means they have often been stuck with unfair contact terms. The proposed laws will seek to expand protections which exist in other areas to provide consumers and small businesses with greater protection when entering into contracts with insurers. Laws to protect consumers and small businesses from unfair...

Istock 505571544 Blog
Consumer and the Law
Is your bank seeking to repossess your home? Here’s what you need to know.

If you fall behind on your mortgage repayments or default on your home loan, your bank may ultimately take possession your home and sell it to pay out your loan. This can be a stressful time for individuals and families, and it is important to understand the process and what rights you have as a borrower. Your bank must not take action against you unless you have been provided with a default notice that contains certain information. A default notice should, among other things: If you pay the overdue amount within the set time, your loan will continue as normal. If you do not pay the overdue amount within the set time, the bank will usually apply for a court order to take possession of your...

Suburban House Aerial View Resize
Business Law
Your rights and obligations as a director in a company

Setting up a company to run a business can be a relatively straightforward process. Most people know that shareholders and directors are the key components of a company. However, few people understand that shareholders and directors have very different roles and so they have different rights and obligations. As experts in dispute resolution, Slater and Gordon has seen the problems that arise when directors do not fully understand their rights and obligations. A director is a person who is responsible for the management of the company’s affairs. All companies must have at least one director. You are considered to be a director if you have been validly appointed as a director of the...

Man Silhouette Business High Rise