Legislative changes to some products and commission arrangements
The important information that you need to know
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Intro about legislative changes and context We've put together a summary for you below. Should you require any assistance, please
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Changes to ARC Super Products from 1 October 2020
In an effort to achieve better outcomes for superannuation members, we will be making a number of changes to fee payments for ARC and ARC Classic products from 1 October 2020. A detailed breakdown of these changes is outlined in the enclosed FAQs.
These changes will result in a fee reduction for most of your clients however, there may be some circumstances where fees may increase depending on the account balance or previous bespoke fee structures that may have been in place.
To download a list of your clients who hold ARC products, you can visit the TAL Adviser Centre and download a Policy Summary report from the Reporting menu or email your request.
Removal of ARC grandfathered commission arrangements
As you may be aware, we are required to remove grandfathering arrangements for conflicted remuneration in relation to financial advice provided to retail clients from selected products by 1 January 2021. In order to comply with our obligations, these conflicted remuneration payments will cease from 1 October 2020 for ARC products. The benefits from ceasing these arrangements are being included in the above fee reductions for members. Further detail is outlined in the FAQ.
The ARC product suite has FOFA-compliant Adviser Service Fee functionality for ARC members and their advisers, so if this is a suitable arrangement for you and your client, your client should complete, sign and return our change of details form.
Investment Option Closure - ARC Guaranteed Cash
A series of Guaranteed Cash Investment Options will be transferred into the standard ARC Cash investment option. This will have the same underlying investment structure as the existing guaranteed options and will be eligible for the new administration fee waiver on standard ARC Cash holdings. This closure does however result in the surrendering of previous investment guarantees. For a list of options being closed and for more information, please see the FAQ.
Removal of grandfathered commission for other products
There are a number of other products across both TAL and Asteron that are currently paying Grandfathered Conflicted Remuneration. Commissions on these products will be paid until 31 December 2020. After this date, regular monthly commission payments will cease. We will start passing the benefit of these commission changes to customers in a phased approach by product, from October 2020. Where regular commission payments cease prior to 31 December 2020, we will make a final one-off payment before 31 December 2020. This will be calculated on the previous months’ commissions and will take into account the new and ongoing business commissions. This will be the final payment made to you in relation to these policies.
It is important to note that these changes only apply to the customer policies in these products. No other products are impacted by this legislative change. If you receive a commission for risk (riders) on the products impacted, you will still receive payments for the risk component of the policy.
See the FAQ for the full list of products paying Grandfathered Conflicted Remuneration.
Client impacts and communications
We’ll be writing to members in ARC and ARC Classic from August 2020 to advise them of the above-mentioned changes. You can view a copy of the communication by clicking here.
We’ll also be writing to your clients impacted by the removal of the grandfathered commissions to let them know about these changes, and to confirm what they mean for their policy. We’ll update you closer to the client communications in October.
Further information
We’re committed to supporting you through these changes, so if you require further assistance, please contact our Adviser Services Team on:
- 1800 031 050 (for Asteron Life); or
- 1300 286 937 (for TAL Adviser Services)
IMPORTANT INFORMATION:
This information has been prepared for use by licensed advisers in their professional capacity only, and is not intended to be provided to nor used by your clients for the purposes of making a decision about any financial product. Any advice is general in nature only and does not take into account your client’s objectives, financial situation or needs. Before acting on it, the appropriateness of the advice for your client should be considered, having regard to those factors. Before deciding to acquire or to continue to hold life insurance issued by TAL, advisers and their clients should consider the relevant Product Disclosure Statement available at www.tal.com.au.
This information is current at July 2020 and may be subject to change. Life Insurance issued by TAL Life Limited GPO Box 5380, Sydney NSW 2001 ABN 70 050 109 450 AFSL 237 848 (TAL)