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CFS moves on grandfathering and insurance commissions
Colonial First State has announced fee changes to advice clients and superannuation fund members as part of its removal of grandfathered conflicted remuneration and insurance-related commissions.
The changes will see insurance commissions removed from legacy superannuation and pension retail products and will take effect from 1 June, this year.
It said it would also be making changes to FirstChoice Employer Super with legacy investment options being closed and members’ investments transferred to corresponding options in an open investment member with grandfathered adviser commission payments ceasing.
Where FirstWrap and Beacon products were concerned, the removal of transaction fees and advice fees will be removed from listed security trades and conflicted remuneration and insurance commissions will also be removed from these products.
Commenting on the move, CFS general manager of product and marketing, Kelly Power said that the changes were part of CFS’ commitment to putting members’ interests first and helping to create a better super system.
“This is a great outcome for our members – we know lowering fees will benefit retirement saving outcomes. However, we recognise this is an adjustment for many advisers and we’re committed to providing early notice and supporting them to help navigate and prepare for the changes ahead,” she said.
“We remain a strong advocate for quality financial advice and support the role that financial advice plays in helping Australians achieve financial wellbeing.”
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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Well done CFS, the final scraps of coal have finally burnt out on the ol' gravy train...
Long overdue and a positive step towards acting in your members best interest...and not those of the Financial Adviser. For far too long CFS has been leaning on the IFA market for distribution, bank distribution died a painful death years ago, the next question is how to remain relevant in the new world?