The Australian Securities and Investments Commission (ASIC) has indicated that it will be looking at financial advice provided by industry funds in the context of another project on the broader question of advice in superannuation.
Answering questions during Senate Estimates, ASIC deputy chairman, Peter Kell acknowledged that the regulator had never looked directly at industry funds with respect to their compliance with the best industry duty under the Future of Financial Advice legislation.
Answering questions from the chair of the Committee, Victorian Liberal Senator, Jane Hume, Kell sought to explain why the regulator had focused on advice provided by the banks and AMP and noted that the lessons learned from that exercise could be translated to other vertically-integrated entities.
“…we've been at pains to highlight that there are lessons here for any vertically integrated firm that's operating in the financial services sector,” the ASIC deputy chairman said. “I think it's important to note that what the regulatory regime expects of financial advisers is, irrespective of the sort of business model they're operating under, they will prioritise the interests of the client, provide appropriate advice and act in the interests of their client.”
“So if there are conflicts of interest in that business model, irrespective of where you are in the financial services sector, you need to manage them in such a way that you can deliver on that promise,” he said.
Asked by Hume whether ASIC had actually ever looked at industry funds' compliance with their best-interest duty, Kell acknowledged that it not done so, per se.
“We are looking at doing some further work on advice in superannuation, so that may well capture that issue you're talking about, yes,” he said.