Banks, planners face further RC grilling
The Royal Commission has not finished scrutinising the banks, with letters to some superannuation funds suggesting it intends questioning the degree to which financial planning commissions have impacted member balances.
The Royal Commission also appears set to investigate the role of financial planners with respect to corporate superannuation funds.
A letter from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, a copy of which has been obtained by Money Management, has revealed a focus on “commission and contribution arrangements” and relationships with financial planners.
The Royal Commission letter has asked the funds to “set out any commission arrangements (whether contractual or otherwise) between the RSE [superannuation] licensee (or any group of which they are part) or the fund and any financial planning or wealth management entity”.
It also asks that this information include “the percentage of commission paid, when such commission is paid, and which person or entity incurs the cost of the payment, including where in part”.
“Where applicable, identify those arrangements which are known as trailing commissions and the circumstances in which those commissions are charged,” the letter said.
It also asks the funds to identify the total number of members, and the percentage of total members, of the fund who are currently paying fees for commissions to financial advisers employed by, or who are authorised representatives of the RSE Licensee.
“For those members who are subject to commissions, identify the source from which those commissions are paid (for example: from the member’s account, from the return on investment or otherwise),” the letter said.
The document also asks funds to “set out any contribution arrangements (whether contractual or otherwise) between the RSE Licensee (or any group of which they are a part), the fund or any employer-sponsor, and any financial planning or wealth management entity or third party, including the percentage of contribution paid, when and to which entity or person such a contribution is paid, and which person or entity incurs the cost of the contribution, including where in part”.
Recommended for you
ASIC has released an update to its regulatory guidance on managing conflicts of interest for financial services businesses on the back of its primate markets surveillance.
The Australian Wealth Advisors Group has completed two strategic investments, doubling its number of authorised representatives and increasing its FUMA by more than $1 million.
A strong demand for core fixed income solutions has seen the Betashares Australian Composite Bond ETF surpass $1 billion in funds under management, driven by both advisers and investors.
As the end of the year approaches, two listed advice licensees have seen significant year-on-year improvement in their share price with only one firm reporting a loss since the start of 2025.
