The Australian Prudential Regulation Authority (APRA) has been asked whether it is aware that a situation is being created where financial advisers will not take on clients unless they have investible assets of more than $1 million.
The regulator was put on the spot about the rising costs of financial services regulation by NSW Liberal back-bencher, Jason Falinski who asked whether that fact should worry the regulator.
“Does it not worry you as an organisation that is meant to ensure the prudential standards of our financial institutions that investors are making decisions on good advice, but we are creating a situation where advisers will not take clients on unless they have $1 million in investible assets because of things like Government regulators increasing their fees and charges by 58%,” Falinski asked during a hearing of the House of Representatives Standing Committee on Economics.
APRA deputy chair, Helen Rowell described Falinski’s question as being “somewhat out of our mandate”.
However, the backbencher put it in the context of financial advice being provided by industry superannuation funds.
“Given that industry super funds are starting to give or are regularly giving financial advice to their members have you spoken to the Australian Securities and investments Commission (ASIC) about the fact that they [the industry funds] continuously describe themselves as providing independent advice?” he asked.
Rowell said that APRA hadn’t had that specific conversation with ASIC.
“I think those measures of transparency and disclosure are primarily for ASIC but we have certainly had conversations with ASIC around the nature of the advice models in the superannuation sector and some of the complexities and issues that can arise in relation to that,” she said.