ASIC outlines crackdown on super advice
The Australian Securities and Investments Commission (ASIC) has signalled a tough approach to superannuation fund underperformance, suggesting that it may be a key indicator of misconduct.
The regulator has also pointed to close scrutiny of advice in superannuation and the erosion of balances resulting from members paying inappropriate or excessive advice fees from superannuation accounts.
It also pointed to a current project looking at 25 superannuation funds involving testing the quality of advice provided.
ASIC chairman, James Shipton told today’s Financial Services Council Leaders Forum in Sydney that the regulator was committed to taking action against trustee misconduct and that it would be looking particularly at trustee behaviour that caused monetary loss to members, financial exclusion, loss of market integrity and confidence and behaviour that undermines competition.
He said that ASIC was also putting trustees on notice where there is persistent underperformance such as:
- Consumers expect super trustees to act in their best interests to improve retirement incomes – consistent underperformers are clearly not doing enough;
- While underperformance is not illegal, it is frequently caused by conduct that does breach the law e.g. conflicts of interest, failure to act in members’ best interests, or lack of diligence by trustees; and
- ASIC will consider persistent underperformance as a key indicator and red flag to help target our work to identify misconduct.
On the question of advice fees, Shipton said ASIC expected trustees to have reviewed their governance and assurance arrangements for fees charged to super accounts and said that ASIC was working on a project examining market structure and conflicts in relation to advice by superannuation funds.
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
