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!