ANZ tells members of ‘benefits’ to grandfathering ban

The move follows an earlier letter ANZ set to advisers last month that reminded members with accounts that currently pay grandfathered commissions to consider ending the payment of future commissions to their financial advisers.

However, another letter from ANZ sent to members dated 3 June 2019 stated that they will “generally benefit from reduced product fees once commission payments cease”.

“Where you have an ongoing relationship with your adviser, we recommend that you speak to them to agree the appropriate way for you to continue to benefit from the services,” the letter said.

“Alternatively, you can advise us directly to cease paying future commission immediately in relation to your account. You are not required to notify your financial adviser in order for us to cease paying commission.”

Speaking exclusively to ifa, chief executive of the Association of Independently Owned Finance Professionals (AIOFP), Peter Johnston, called the letter from ANZ “clumsy” and “inexpedient”.

“Just how naive does the ANZ and ASIC think advisers and their clients are with this rather inexpedient and clumsy approach to grandfathered revenue?” Mr Johnston said.

“For institutions to say ‘you will generally benefit’ is institutional speak for ‘we will clip the ticket by charging an administration fee and you may have a bit left over for you…’. This theme clearly comes out in the ANZ letter.

“Unless it is legislated, institutions [or anyone] cannot be forced to give someone else their property and our legal advice is it is unconstitutional anyway.

“The advice community is very tired of the continual misinformation and negative political spin around grandfathered revenue.”

Mr Johnston reiterated the AIOFP’s efforts to challenge a potential ban on grandfathered revenue in the High Court of Australia.

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].