Royal Commission in 150 words or less….

Prepared by Peter Hagias.

You’ll see many articles summarising the findings handed down by the Royal Commission. This is the shortest summary you’ll read:

  • Finance brokers will be regulated like financial planners and subject to a best interests duty.
  • Upfront and trailing commissions on mortgages are to be banned, requiring the borrower to pay the broker. However the Government has expressed reservations on this.
  • Opt-in notices will be required annually, and will apply to all OFA clients regardless of when they entered into the OFA.
  • Grandfathered commissions are to be removed entirely.
  • Life insurance commissions are to be reduced, with a view of ultimately removing them.
  • Licensees will be required to investigate cases of adviser misconduct and promptly take steps to notify affected clients and remediate the files.
  • Licensees will be required to identify cultural and governance problems and promptly address them.
  • The unfair contracts regime will apply to insurance contracts and the duty of disclosure will be limited to an obligation to take reasonable care to not make a misrepresentation.

We’re preparing a full report of the findings with our view on the practical effect these will have on your AFSL/ACL and this will be uploaded to the compliance portal for our clients. If you would like us to send the full report to you, please let us know!