ASIC targets $200m in fee for no service

The Australian Securities and Investments Commission (ASIC) anticipates getting over $200 million returned to consumers out of its so-called “fee for no service” remediation projects plus $30 million out of quality-of-advice work with the large institutions.

The regulator has outlined to the Senate Economics Committee inquiry into consumer protection in the banking, insurance and financial sector the extent of its recent work in the financial planning space.

It said that in the financial advice space in the last 12 months it had extracted six enforceable undertakings; banned 41 individuals from providing financial advice; had four infringement notices and had undertaken seven criminal actions.

“We have had four what we call 'other outcomes', where people have significantly changed things as a result of our work; we have imposed one set of additional licence conditions; we have cancelled 12 financial services licences for advisers; we have had two voluntarily cancelled in light of our action; we have commenced or finished four civil penalty regimes,” ASIC senior executive leader, Joanna Bird told the committee.

“Very importantly, we have had our first civil penalty action for breach of the new best interest duty, which came out recently – that was against a licensee called National Sterling—and we have suspended four licences. On top of that we have done significant remediation.”

“In our fee-for-no-service remediations, we have got up to just over $60 million, and we anticipate getting over $200 million returned to consumers out of that project. We will have about $30 million in the backward-looking quality-of-advice work that we have done with the large institutions,” Bird said.