FPA warns on product intervention consequences
The Financial Planning Association (FPA) has alerted the Australian Securities and Investment Commission (ASIC) to the possibility of its product intervention power leading to product manufacturers seeking to recoup potential losses from intervention via higher fees or reduced services.
In a submission filed in response to ASIC consultation around implementation of the product intervention power, the FPA said that while it supported the measure ASIC needed to consider the implications.
It said one of those implications was that product providers would seek to recoup potential losses from intervention and exampled them seeking to increase fees or reduce service levels.
“The problem will be exacerbated by the potential for the intervention power to affect the management of liquidity by product providers,” the FPA said. “The result is that consumers end up paying for the protection, which may not be the best use of their resources.”
However, the FPA said that it supported the proactive power for ASIC to intervene when a product resulted or was likely to result in significant detriment to consumers.
“We welcome the provision that a type of product intervention includes the mandate of seeking personal advice before being offered the product,” the FPA submission said.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
