MLC CEO Geoff Lloyd has thrown a challenge out to dealer groups around the country to follow his lead by giving advisers amnesty on their licensee fees as the cononavirus crisis situation and recent policy changes continue to buffet practices.

On Tuesday Lloyd announced MLC will waive 100 per cent of all licensee fees for three months starting on April 1, followed by three months of a 50 per cent discount on licensee fees for advisers within the group. He made the announcement during the Investment Magazine & Professional Planner Retirement Conference live event stream. Readers with digital delegate access can view content and earn CPD points from the event here.

“One thing we can do that’s in our control is to take the pressure off fees, and we encourage every dealer group out there to think about doing the same thing,” Lloyd said in conversation with Conexus Financial CEO Colin Tate during one of the opening sessions of the Retirement Conference.

Lloyd also simultaneously announced to MLC’s advice network on Tuesday morning the group would extend fixed-term advice agreement transitions by three months and also delay commencement of planned transitions of Apogee and Meritum advisers to Godfrey Pembroke in an attempt to cut advisers some slack.

“We are a large business and the planners out there servicing clients are in small businesses, dealing with difficult and different challenges every day,” Lloyd said.

“We hope that announcement take pressure off fees for the next 6 months,” he added.

Lloyd’s announcement was lauded by FPA chief executive Dante De Gori, who said MLC’s move could lead to more licensees and institutions providing support to advisers at this challenging time. De Gori made this observation during a subsequent session in which he discussed the government and industry response to the coronavirus crisis situation alongside Willis Towers Watson head of retirement solutions, Nick Callil.

Crisis times, crisis measures

MLC’s Lloyd discussed his own personal and professional experiences as the crisis has unfolded, which included working from his home in isolation in Sydney following his daughter’s minor surgery, coordinating remote working with leadership teams and staff, as well as providing insight into discussions with government during crisis meetings as part of his role as chair of the Financial Services Council.

‘Direct’, ‘open’, ‘specific’ and ‘bipartisan’ were adjectives Lloyd used to characterise the discussions he was exposed to when government engaged industry, which resulted in unprecedented stimulus pandemic measures including changes to the draw down minimum and early access to super for individuals in distress.

While it’s unclear whether advisers can expect further support from the government in the form of reprieves from new legislative requirements set to be introduced, Lloyd implored advisers to stay positive about the changes ahead.

In the session preceding Lloyd’s to open the Retirement Conference, assistant financial services minister Jane Hume was reluctant to give specific guidance on whether the government would pause implementation of legislation mapped out under the post-royal commission road map.

“We heard the legislative agenda can’t be changes, but there is a lot we can do,” Lloyd said.

“Things can change for the better. We should use this crisis to make long-term change,” he said.

Smith is head of content and managing editor of Professional Planner and Investment Magazine.
7 comments on “Lloyd unveils stimulus package for MLC advisers”
  1. Avatar Simon Swanson

    The industry has made enormous progress separating product from advice, and elevating the value of professional advice.

    Waiving licensing fees undermines this progress, given only manufacturer-owned licensees are in a financial position to cut fees.

    Simon Swanson

  2. Avatar Neil Swindells

    Having decades of experience in running licensees and advice practices and product manufacturers, and caring about advice as I do, I had to enter this debate.
    I also wanted to say something, as I am Chair of Futuro, an excellent licensee that is not in need of a PR exercise to make up for past bad deeds.
    Some points I would like to make:
    1. Paul is being consistent. He wants to be in the business of owning advice practices and accounting firms, he does not want to run a licensee. But he values the role of the licensee.
    2. The banks just want to get out of being a licensee and the obligations that go with it. It was always a mismatch for banks. Banks hate risk. As a licensee you make money by managing risk effectively. So banks just selling out to avoid the risk is no surprise.
    3, For Geoff to suggest that other licensees should give up significant income, which would result in either a decline in services and financial strength or both is unreasonable. With NAB/MLC dealing with the odd billion in client compo, MLC can afford to throw a few million at being seen to be a Robin Hood.
    4. At Futuro, we will not go for such a gimmick, we will remain focused on supporting our advisers in helping their clients at this critical time.
    5. Just as they have in the past, MLC’s boss is claiming leadership on fees, but let us be frank here. How many advisers say they do not charge asset based fees but charge some type of tiered fee structure dependent upon services provided and assets? While not an asset based fee, it is an asset limited fee. The claim by Geoff is a bit holier than thou.
    6. The reason small licensees have struggled to build up capital in the past is that fees have been held down by vertically integrated banks and AMP. Their licensees were capitalized by the banks who now want to get rid of them. And these models I do understand well but the world has changed.
    7. If the capital shot at the smaller licensees who now have to pick up where the banks are bailing out was a cheap shot, the reference to Paul’s business being Italian and the link to coronavirus by Geoff, was both desperate and below the belt.
    8. My final comment is that as a licensee, when your advisers are not happy or you are not delivering the services you should know well enough the last resort is to offer all advisers a fee free period, rather than get the relationship and services right.

2 of 2 >
Leave a comment