ASIC informed that it has updated its guidance on conflicted remuneration to more closely reflect a range of regulatory changes since the guide was issued in 2013.
The updated Regulatory Guide 246 Conflicted and other banned remuneration (RG 246), previously titled Conflicted remuneration) now includes guidance on the operation of the incoming life insurance remuneration reforms and additional working examples.
The life insurance remuneration reforms, which commence on 1 January 2018, mean remuneration arrangements used in some life insurance distribution channels, including direct sales, will need to change.
Other regulatory changes that have impacted on the guidance in RG 246 include:
- amendments to the grandfathering arrangements for the ban on conflicted remuneration
- the exclusion for basic banking products, and
- the stamping fee and brokerage exclusions.
In addition to updating the guidance to reflect regulatory changes, RG 246 now:
- provides additional guidance on the exclusion for benefits paid by the client
- includes examples of when conference benefits are likely to be conflicted remuneration, and
- reiterates that commissions given by a property developer to an adviser where the adviser recommends the establishment, or use, of an SMSF to purchase property are likely to be conflicted remuneration.
ASIC will monitor industry’s implementation of the life insurance remuneration reforms and will consider developing additional guidance if needed to address any specific issues or concerns.