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
A quarter of advisers who commenced on the FAR within the last two years have already switched licensees or practices, adding validity to practice owners’ professional year (PY) concerns.
Integrated wealth and financial services group Rethink has launched a financial planning arm called Rethink Wealth to expand beyond property investing and into holistic wealth management.
While adviser numbers continue to slowly creep back up, the latest Wealth Data analysis reveals they would actually be in the green for the calendar year if it weren’t for so many losses in the limited advice space.
Iress has appointed a chief AI officer to spearhead the fintech’s strategic focus on AI, with chief executive Marcus Price describing how the technology opens the doors to a “new frontier for wealth advice”.
