Grandfathering under FOFA extended to platform operators

The Future of Financial Advice reforms to the Corporations Act 2001 (the Act) implemented a ban on conflicted remuneration for Australian financial services licensees and authorised representatives that will apply from 1 July 2013 (unless the licensee or authorised representative opts in earlier). However, arrangements entered into before that 'application date' will be 'grandfathered' with the effect that any benefit given under such an arrangement, even if given after the application date, will not constitute conflicted remuneration.

Benefits given by platform operators were initially excluded from the grandfathering arrangements in section 1528 of the Act. Platform operators had been lobbying the Government to change this position before 1 July 2013, given the significant adverse effect the reforms will have on the existing business arrangements that many platform operators have with their clients.