The financial services minister has said that recently introduced reforms to ongoing fee arrangements (OFAs), which will cost the industry $28 million, were necessary to stop clients from being “charged invisibly”.
Wall Street licence exemption a double-edged sword
Removing barriers to entry for global wealth managers could put downward pressure on investor fees, but undo hard-earned lifts in the quality of financial advice.
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A few years before the Hayne royal commission, a hot-shot wealth manager in a high-rise Manhattan boardroom was asked what it would take for him to bring his firm Down Under.
“Those big banks of yours would need to make some space,” the Ivy-leaguer replied, demonstrating a surprisingly astute knowledge of the Australian market. “And some of your rules and regulations would probably need to go too.”
Perth financial planner and Liberal Party member Steve Blizard says allowing firms to operate in Australia without a licence creates an “uneven playing field”.
Clients to foot $28m annual renewals bill
Clients to foot $28m annual renewals bill
Concessions made by the government in its annual renewal legislation currently before Parliament are positive, but will have little impact on the multimillion-dollar bottom line costs of the measures, advisers and licensees say.
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The finalised legislation, which was introduced to Parliament on one of the last sitting days of the year, contains a number of concessions following industry consultation, including the merger of fee disclosure statements with annual renewal of ongoing fee arrangements and relaxed requirements around the dates that advisers must seek client consent.