In perhaps the least surprising response to the Financial Services Royal Commission, draft legislation was introduced banning grandfathered commissions from January 2021. This gives industry just over 18 months to reorganise their businesses to the extent required.
There was still opposition from some financial planning groups, on the basis many businesses were bought on the strength of commissions being paid into the future, and there will be a good deal of work required to smoothly transition to the new regime.
Nevertheless, the change has been coming for a while and cannot be a surprise.
The draft legislation also includes an obligation for product issuers to rebate clients for any grandfathered remuneration paid after the January 2021 date.