The ban on conflicted remuneration is part of the Future of Financial Advice (FOFA) reforms, and applies to both personal and general advice given to retail clients about any financial product, including managed investments, superannuation and platforms. The ban applies to commissions, volume-based payments, soft dollar benefits and volume-based shelf space fees.

Regulatory Guide 246 Conflicted remuneration (RG 246) covers:

• volume-based benefits
• performance benefits for employees
• volume-based shelf space fees
• asset based fees on borrowed amounts
• transitional provisions
• the anti avoidance provision.

As previously announced, our final guidance on performance benefits as part of employee remuneration focuses on the principles underlying when a performance benefit is more likely to be conflicted remuneration. This change was made following feedback on our draft guidance, which had included indicative thresholds as to when ASIC would be more likely to scrutinise such a benefit.

ASIC Commissioner Peter Kell said: ‘The key principle underlying the conflicted remuneration ban is to ensure the interests of advisers and retail clients are more closely aligned, improving the quality of advice provided.

‘Complying with this ban means payment structures used in some business models or delivery channels will need to change. We will continue to work with industry as they implement these changes.’

To read RG 246 Conflicted remuneration, click here.

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