MLC will take a wait-and-see approach to its Navigator investment platform in light of the banning of volume rebates highlighted in the federal government’s Future of Financial Advice (FOFA) reforms.
MLC chief executive Steve Tucker said while the platform does have volume rebate arrangements; the group plans to wait for further reform clarity before making any decisions on its future.
“The Navigator platform does have volume rebate arrangements in place so depending on the clarity around whether there is grandfathering or what the dates are around that will have implications for Navigator,” Tucker said.
“But Navigator is well progressed in its thinking about how to help advisers through the transition and adapt a different business model if that is required.”
Late last month, the Minister for Financial Services Bill Shorten handed down the FOFA reforms.
As part of the reforms, Shorten announced a broad comprehensive ban involving a prohibition of any form of payment relating to volume or sales targets from any financial services business to dealer groups, authorised representatives or advisers.
“While this broad ban on volume payments will require some adjustment by industry, the measure will enhance competition, with platforms competing with one another purely on price and quality for the client, rather than by distributing their products through volume bonuses to dealer groups or advisers,” a statement from the federal government said.
Commenting on the ban, Tucker said: “We think it’s time for volume rebates and bonuses to go but let’s just acknowledge that it is a structural shift and we need to have time for people to adjust their businesses.”
