✦ Plain-English Summary

Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) 2019

What it does

Financial advisers and investment platforms have been allowed to accept certain payments and commissions from product providers — even though these payments could create a conflict of interest with giving you unbiased advice. This bill stops that loophole by ending "grandfathered" (old, exempted) conflicted payments from 1 January 2021.

After that date, advisers can only accept these payments if the arrangement was made after the law changed, or if they come from a platform operator. This forces a choice: either get rid of conflicted payment arrangements or make them transparent and properly justified.

Why it matters

Financial advisers recommend products that directly pay them commissions. Before this bill, some advisers could keep these arrangements indefinitely under old exemptions. Ending that means your adviser's recommendations should be less influenced by which product puts the most money in their pocket.

Key details

• Start date: 1 January 2021 — the grandfathering protection ends on this date
• Who's affected: Financial services licensees and their representatives (advisers, brokers, planners)
• Exception: Payments from platform operators continue to be allowed — these are treated differently because platform operators aren't product providers pushing specific investments

Official Description

Implements a recommendation of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry by amending the Corporations Act 2001 to: remove grandfathering arrangements for conflicted remuneration and other banned remuneration from 1 January 2021; and enable regulations to provide for a scheme under which amounts that would otherwise have been paid as conflicted remuneration are rebated to affected customers.

Committee Referrals

Senate Standing Committee for the Scrutiny of Bills

No formal division recorded

This bill passed by voice vote — parliament agreed without calling a formal count. A division is only recorded when a member explicitly requests one.

No votes yet.

No votes were recorded for this bill.