ASIC answer confirms Hayne got it wrong on intra-fund advice

The Australian Securities and Investments Commission (ASIC) has confirmed that the Royal Commission got it wrong on the status of intra-fund advice.

Appearing before the Parliamentary Joint Committee on Corporations and Financial Services, ASIC representatives confirmed that intra-fund advice has to be regarded as delivering personal advice.

ASIC executives confirmed the status of intra-fund advice under questioning from NSW Liberal Senator, Andrew Bragg.

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Discussing the issue later with Money Management, Bragg said his questioning had been aimed at whether ASIC agreed with the Royal Commission’s statements on intra fund advice and the therefore the rationale for policy recommendations.

“I am particularly conscious we do not want to see the emergence of regulatory arbitrage,” he said. “As a hypothetical, I wouldn’t want to see a widening of personal intra-fund advice if we are going to restrict the availability of other forms of fee for service advice.

Bragg said he believed that regulatory arbitrage never worked for consumers.

“In this policy space, we ant more Australians to seek high quality, non-conflicted advice,” he said.

Bragg agreed that ASIC appeared to have confirmed that the Royal Commission’s position that intra fund advice was not personal advice was inaccurate.

The question about the Royal Commissioner, Kenneth Hayne’s interpretation of the status of intra fund advice has been a bone of contention since the Royal Commission’s final report was issued earlier this year.

The Financial Planning Association (FPA) amongst others took issue with Hayne’s statement that intra-fund advice did not represent personal advice.

The FPA noted that Hayne’s position was at odds with Government legislation and ASIC’s stated position that intra-fund advice was personal advice that took into consideration the individual’s circumstances as they related to the member’s interest in the superannuation fund.

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It's all got way too complicated.

That's because the lawyers got involved. Look what happened to SoA's.

OMG.. what hope have we got where people calling the shots do not actually understand.. the industry is in a mess and planners have been let down by the industry

Well that wont work for the banks - they just got rid of all there advice groups so they could sell product through intrafund advice with bank tellers pretending to offer 'general' advice only. You know, maybe ASIC and APRA should start asking financial planning advice firms about the direction of financial advice rather than bankers who have no idea what they are talking about...just a thought?

Hayne got something wrong?!?
Strike me lucky!
Maybe there is a HUGE chance he got a whole lot wrong because he didn't really understand the industry?
A solicitor quoted a client $4,000 for probate and a house sale - I did all the other work, and the bill came in at $8,000 - when I asked him what happened, he had it costed.
Then presented a bill for $8,500! For the costing.
Royal commission that :P

what was your fee ?

I did it for free because they were a long-standing client.
They were paying me $300 a month before they died and that was for at least monthly, and in the end weekly contact, as I attempted to protect their assets while they were losing their faculties. I had them listed for a VCAT hearing to get someone appointed as an admin, and they died two days before of a recently revealed cancer and stopping eating/drinking.
Hayne also doesn't understand that we often LOVE our client and often want them to live an enjoyable life.

these are the real untold stories of financial planners doing great work, impacting lives in the communities we serve.

we need to change the narrative of financial planners. we need to tell our stories.

no one is going to do it for us, we need to do it ourselves.

great work. well done. we are all proud of you.

same experience, a lawyer charging a widow $8,000 in legal fees to transfer a jointly owned house and 1 CBA bank account to the widow's name. I can appreciate there is Probate and Legal costs but we're talking about at least $6K in charge out rates. I handled some direct shares, the reversionary pension and saved her $30,000 when the car salesmen offered her $5,000 for the 12 month old brand new car. I also did my work for free.

Again, well done Adam.

It appears lawyers don't like competition when charging fees to dead people

Hayne was a disaster, again we see someone get their 15 mins of fame do a job with no understanding of the industry and what impact his recommendations would have on everyone, including clients.
The whole saga was like a third rate soap opera, does he care no, he picks up his astronomical fees and rides of into the sunset.

I think Hayne got it wrong on many things...

Hayne got it wrong on everything. But if i was asked to spend 6 months making recommendations to engineers as to how they could build better bridges i would have done equaly as bad a job. BECAUSE I HAVE NO EXPERIENCE OR KNOWLEDGE OF THE INDUSTRY. I dont think Hayne is a bad person, he is just an elistst, golden spooned, self important lackey of the banks.

What is needed in the future are better terms of reference. A wholistic look into how the banks make money and how they exploit customers.

Did anyone not think to ask the royal commission to look into payday lending or credit card gouging? The intermederies are not the problem. Its the banking system as a whole and the fact that there are different rules for everyone and no one at the top is ever held accountable.

How are some able to sell superannuation, insurances, SMSF, property (the biggest investment most people make) without any qualifications or training, when i have to do 50 hours of training each year, hold a degree in FP, pay around $10k pa for insurance just to change someone's investment from super to pension.

Its all a joke. But if you cant beat them, may as well join them. Just do General Advice for everything and let the lawyers deal with the no paperwork and no insurance (hence no one to sue) when things go wrong. BT gets away with it....

Of course Hayne didn't go after Industry Funds..... They are 'Too big to fail' and orchestrated ongoing Ponzi schemes.

Hayne also said that risk commission was conflicted. If they are all paying the same commission where's the conflict?

Good luck getting clients to front the cost of risk advice. With current underwriting standards we are lucky if get 1-2 clean skins a year.

Bet Hayne has no idea what a clean skin is either!!!

On Haynes fee he would be drinking Grange not cleanskins that's for sure.

I am fine with risk commissions but you ask where is the conflict...?

1. We get paid more commission the higher the amount of cover you recommend.
2. You don't get paid to recommend that existing cover remains suitable, only to replace it.

Risk commission has its place but lets not act like there isn't a conflict that some are churning for their own benefit (and have been for years).

Yep; it's been going on for 'donkeys' years. That's part of the reason we are all having to deal with what we have now; the 10% who spoilt it for the rest of us.

If a superannuation member calls their fund and asks for advice on contribution types, nomination of beneficiary options and implications, insurance types, cover levels, premium costs, information on their current investment options and available investment options or transition to retirement options, IT IS ADVICE.
If the member is discussing their own account or personal situation, IT IS ADVICE.
It is advice because the fund charges every member an advice fee component built into the admin fee whether they access it or not. It is effectively a retainer cost paid by all members for access to advice, rather than necessarily utilising the service.
ASIC need to request the last 3 years of telephone recordings from all Industry Funds and ascertain the extent of what advice, instruction or direction has been provided over the phone to members under the guise of general advice.
I suspect the findings would be interesting.
Kenneth Hayne took his approach during the Royal Commission because his target was the banks and retail funds.
There appeared to be an ideological bias rather than impartial assessment of all issues.
The limited time frame of the RC allowed the scope of investigation to be narrowed and hence the Industry Funds escaped completely unscathed.

Agent 86 you can't be right. Charging industry fund members for advice they don't avail themselves of would be "fee for no service."

Hayne did such a great job surely his intellectual wizardry would have unearthed such unethical behaviour??

The RC was needed, especially for the banks, it's a shame it was almost as incompetent as ASIC.

Joke, mess, and disaster are three words that come to mind .... never mind that this half baked cake all becomes effective from 1 Jan 2020.

Old timer..add a fourth word..bankrupt

ISF member: Can I consolidate my two super funds?
Call Centre person: Yes, I will send you the forms.
Is that a good idea?
Yes just fill in the forms
will I save fees?
yes, just fill in the forms.
[no personal advice, just facilitating the clients wishes?]

" Is that a good idea"?....asking for opinion and advice
" Will I save fees" ?.....asking for opinion and advice.
Cannot provide an opinion or advice without first having adequate information on which to base that opinion or advice.
By agreeing with the member's proposed intention to do something, it automatically provides support to that member's actions.
Therefore, the member may act on the inference their intention is being supported and approved without having access to accurate information on which to make that decision.
By agreeing to or supporting statements provided by a member, it is providing either subliminal or actual advice which may encourage the member to act in a manner that may be not in their best interest.

Right on 86. But that will be allowed for ISF ... there are at least three interpretations operating now in "advice".

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