ASIC confirms likelihood of industry fund advice probe

A senior Australian Securities and Investments Commission (ASIC) executive has told a gathering of industry fund trustees and executives that the regulator will probably move to examine the quality of financial advice being provided by industry funds.

Addressing the Conference of Major Superannuation Funds (CMSF) in Brisbane, ASIC senior executive leader, Investment Managers and Superannuation, Jane Eccleston confirmed the likelihood of the regulator taking a look at advice provided through vertically-integrated superannuation organisations.

Echoing a response given by ASIC deputy chairman, Peter Kell to a Parliamentary Committee earlier this month, Eccleston said that ASIC had looked at financial advice provided vertically-integrated banks and insurers because of the “embedded conflicts” which existed within such structures”.

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However, she said ASIC was not interested in business models such much as the quality of the advice that was being provided.

Directly questioned about whether industry funds might be on ASIC’s radar, Eccleston said the regulator would probably be doing more work on integrated structured, including financial advice provided via industry superannuation funds.

“But not because we think [the advice] is bad, but to ensure it meets members’ needs,” she said.

Kell last month admitted to a Parliamentary Committee that ASIC had not yet specifically examined advice provided by industry funds, but suggested it was likely to do so sometime in the future.

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So if it doesn’t meet the members “needs” then isn’t it bad advice?

exactly right. It's very worrying when the regulator becomes the defacto protector of a particular industry sector. Otherwise known as bias.

“ but not because we think the advice is bad...” sums up asics thoughts on industry super.
If you have had the opportunity to see an industry fund SoA you would laugh at that comment

How can a senior ASIC Executive Leader make a statement of opinion inferring that the "probable" enquiry or investigation would not be implemented because the advice is bad, prior to an investigation and assessment even commencing ????????
Meeting member's needs would be adhering to the member's best interest's would it not and so how can this requirement possibly be satisfied.?
How can anyone at that level make a statement that clearly implicates ASIC as having a pre-determined approach or position on Industry Fund advice when ASIC have recently admitted to never having investigated them before.!
So, there has never been any precedent or previous evidence gathered on which to form a basis of opinion and there is already a pre-determined opinion of quality of advice provided.
It is very much starting to appear that ASIC are uncertain of what they may uncover and completely uncertain as to how they would deal with it.

They wont do a thing, it doesn't suit their narrative. If only ASIC had the same open mind when it came to advice from any other sector rather than the union funds. There is good and bad advice in all sectors, just not in ASIC's mind. One has to wonder why ASIC keeps putting vertical integration on the agenda, but refuses to investigate the most vertically integrated player in the advice market, union funds.

the thin edge of the wedge is better than no wedge at all.

Millions & millions of dollars diverted to unions and associated entities and millions for sporting club sponsorship.
Sole Purpose Test ?......epic fail!
The ATO states " the fund needs to be maintained for the SOLE PURPOSE of providing retirement benefits to your members, or to their dependants if a member dies before retirement."
" It's likely your fund will NOT meet the sole purpose test if you or ANYONE ELSE, directly or indirectly, obtains a financial benefit when making investment decisions and arrangements (other than increasing the return to your fund)"
Let ASIC ask the specific Industry Funds who have donated millions of dollars to unions and associated entities, how they justify that a direct or indirect financial benefit is not being obtained and how that practice specifically provides retirement benefits to their members.
This is a powder keg that is getting close to blowing !

Here is another example of a super fund offering something outside of the Sole purpose test. Have a look at Qsuper website that offers this deal "Wealth iQ can help improve your financial wellbeing ..., with a simple check-up. Plus you could win tickets to watch the final stage of the Queen’s Baton Relay or $10,000 for your community."

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