How ASIC ran out of pages to explain grandfathering fall-out

The Australian Securities and Investments Commission (ASIC) has claimed it was aware of the complexities around potential client disadvantage stemming from an end to grandfathering but did not inform the Royal Commission because it ran out of submission pages to do so.

The chairman of ASIC, James Shipton, told the Parliamentary Joint Committee on Corporations and Financial Services that the regulator’s submission to the Royal Commission dealing with grandfathering had “hit the page limit”.

Shipton had been asked by Queensland Liberal back-bencher, Bert Van Mannen, whether knowing there were issues around client disadvantage it would have been prudent for ASIC to have recommended a longer transition period for the ending of grandfathering rather than the “short transition period” it did actually recommend.

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After acknowledging that ASIC had not fully apprised the Royal Commission of all of the issues around ending grandfathering, senior ASIC executive, Joanna Bird, acknowledged that the issues were significant and were being discussed with Treasury.

Van Mannen said that, while he was not opposed in general terms to the ending of grandfathering, he was concerned that the totality of the risk and consequence on clients involved had not been fully thought through.

“The fact that that work hasn't been done prior to you making the comments in your submission to the royal commission, which has subsequently informed legislative decisions made in this place, I find disappointing and frustrating in the least,” he said.

Bird acknowledged that the complexities existed and that they had been raised with ASIC by both product issuers and advisers, adding that “we have been discussing them with the Treasury as they settled the legislation and the regulations that will be made under them”.

“It is for that reason also that our review has a qualitative part, where we intend to speak to the product issuers about all those sorts of practical difficulties and try and help them solve them and report those to the government as well, because you are right; it is a complex situation,” Bird said.

“While the principle is right, as you say, there will be complexities around the edges as we try to implement it, and we want to work with industry to make that work.”




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If it wasn't so serious it would be funny... just pathetic and a further enquiry into this is warranted

Shipton, incompetent.

*nods*

This reeks of BS. Corruption or utter uselessness?

As pathetic as the snivelling kid who used, "Sorry Miss, the dog ate my homework" excuse.

Yet product manufacturers are turning off grandfathered commissions right now, and pocketing the commissions for themselves. ASIC and the legislators again asleep at the wheel while clients are left worse off and the product manufacturers are laughing all the way to the bank. Considering the outcomes maybe ASIC could have asked for a few extra pages in order to protect clients.

Hayne said on 27 April 2018:
"Now, to that end, I’m minded to fix an initial page limit of 35 pages in respect of these general issues. If a party seeks to submit that it can’t deal with the issues fully with that page limit, then that party may and should apply for an extension of the permitted length of submission, but I do ask that the basis for that application be explained and supported in detail. Putting it bluntly, it won’t be enough just to say, “I want more.” I will need to be persuaded about why you need more."
ASIC's submission was 32 pages long with 3 pages to spare.

So...... they didn't run out of pages then ??????????
This seems contradictory to the facts.
Even in 3 pages of submission, you could briefly outline serious concerns with a fast tracked process regarding the banning of grandfathered commissions and recommend a period of due diligence and analysis prior to determining an outcome ?
This is just getting murkier every minute and again smacks of achieving a pre-determined outcome based on very thin evidence......just like LIF.

Yep. One day the electorate is finally going to work out the consequences of allowing a Bolshevik outfit run the country. But at the moment, the Coalition is clueless about the dangers. The Union Super funds can't believe their luck.

ASIC has had been dishonest and engaged in misleading and deceptive conduct by doing this.
James Shipton should be dismissed as the senior person at ASIC who ran out paper and didn't ask for more, knowing that what was written was incomplete.
Not dissimilar to ASIC withholding evidence at the Royal Commision that several Dover advisers had been inspected by ASIC and given a clean bill of health only for them to be hung out to dry at the Royal Commission saying they were poor planners.
Not unlike the LIF reports that were very selective and changed the Industry.
Come on, you expect more of us . We expect more of you.
Life is not meant to be fair but when your senior ASIC people betray trust what sort of example is that.
Shippo go and have a coffee with banks or Industry Super and give them your regime while your their. Your work is nearly done.

and then following up by donating tens of millions of dollars to left wing activist groups

Not much Safe Harbour of Best Interest Duties covered off there.
Is it Appropriate Advice?
Was there a warning for incomplete or inaccurate information?
What would an adviser get for that?

ASIC, just another level of ignorance that you shown from the influence and implementation over LIF to this fiasco and not understanding how your unilateral totalitarian decisions are on their way to destroy a whole industry, with advisers and clients both being disregarded as just flotsam & jetsam

Incompetence at its finest! Time after time, they have shown their inept hand and how ASIC are a financial services regulator beggars belief. History will note this!

Agree with all of the comments, but what's more, I am being slugged a pretty penny to fund ASIC. "Not happy Jan" comes nowhere near close enough to what I actually think about all this.

they slug you after bleating no money then turn around and give anti-planner lobbyists Choice millions. This excludes the many millions given by ASIC to Choice's activist-in-arms "counselling" and "literacy" advocates - all anti-planner anti-broker pro Industry Fund pro ALP/Green. Get into your Senators and MPs and stop voting for them until they get active.

Well, this would be very good news indeed for the impending court case from AIOFP.

If I wrote a SOA with this level of research, I would be banned by ASIC. ASIC can act like Mr damn Magoo and rort all this stuff to their own benefit and no one blinks a eye. ASIC, where the socialists go to live out life in luxury.

More dishonesty from ASIC. This is just like the LIF all over again. Perhaps Shipton and others at ASIC should be taking an exam in Ethics?
The lunatics are running the asylum

It's liking providing a comprehensive retirement SoA and the only info I have is their super balance.. just a bloody joke

ASIC should be the Government Department that ABC's series "Utopia" is set around. Except in the real world, these bureaucrats are not funny.

Welcome to the impending Australian Civil War, which, given the Left's:

* Childish hysteria, unwillingness to accept ANY personal responsibility, and "Perpetual Professional Victimhood";
* Infiltration of institutions from and primary schools up to Senior "Public Disservants";
* Politicians of all stripes general ignorance, incompetence, outright stupidity, avarice, and rapacious greed;

IMO, is inevitable.

“Democracy is not a natural state of affairs”; life is biologically driven to “Survival of the Fittest’'” and “Law of the Jungle”, which is what is happening here, through “Lawfare”.

The main issue is not "Grandfathered Commission [or "Trailing Commission" or "Servicing Commission"]. All of those issues can easily be resolved [for example] by mandating that they be included in the Fee Disclosure Statement ["FDS"] regime.

BTW, “Trail Commission” was created in the mid-late 1980’s with a reduction in the “Upfront Commission” as a "Retainer" mechanism for Advisers to support clientele over the longer term with service and advice, and help move away from the purely transactional “Catch and kill”, which, [for example...] most lawyers, accountants, and other so called “professionals” use as a fee model, and which is being ignorantly imposed on the Financial Services Industry.

Financial Services is a very long term, transitional and transformational industry, not a transactional one.

1. The main issue here is the Government completely ignoring Constitutional limits on confiscating [“Resuming”...] property without just recompense;

2. A "Government" which ignores the most fundamental Founding Documents of a nation is a "Government" which is well on its way to totalitarianism.

You can philosophically argue policy, costs, and potential consequences.

You can't attempt to ignore and undermine the most fundamental aspects, founding documentation, and agreed cultural narrative of a law abiding society without serious consequences and precedents being created.

It is a blatant attempt to grab power and confiscate private property [an income stream]; worked for or bought and paid for legally. It is "Might Versus Right", and an unbridled attempt to see "What can we get away with".

This would only be the [already well advanced] start of the destruction of Australian society - just watch as "Type A" personality politicians grab more and more, until we are back in a bankrupt, class, caste, and aristocratically based society.

It is another step on the road to dictatorship and the breakdown of a democratic society, much like Venezuela gradually legislated and "Bought off" the Public Service, military, and other interested parties while the country descended into chaos, bankruptcy, and lawlessness. There are numerous other examples of abusive legislation. For example:

* Why and how did the Mortgage Broking Industry just recently manage to rebuff the Government’s intention to outlaw Mortgage Trailing Commission? Unfortunately, it was not calm, rational, systemic analysis – it was purely a demonstration of political power and determination...

* Why and how has the Government circumvented the Constitution for control of farmer’s land use, vegetation clearing, and without just compensation? They used legislative tricks, ostensibly devolving responsibility for implementing the Kyoto Agreements to the States, under the guise of “Environmental Legislation”? This is now being challenged in the High Court.

3. In addition, the fact that this is clear, obvious, and already documented [Treasury opinion pre FoFA – nothing has changed] is an even more blatant disregard for the law, democracy, good governance, and acting in the "Best Interests" of a Nation.

Anyone who can read legislation knows that there is more and more legislation "criminalising" basic civil activities across all aspects of life across Australia; mandating "Guilty Until Proven Innocent" [rather than the basic Western "Innocent Until Proven Guilty"]; and unilaterally imposing enormous penalties, all which can be implemented with the click of a mouse. This is “Bureaucratic Totalitarianism”.

In addition, to legally unwind this corrupt perversion takes years, sometimes decades [if at all possible], and usually has legal costs in the hundreds of thousands, often millions of dollars – all while the system gets pushed further and further off the path of democratic principles and good governance; while the citizenry trusts Government less and less; and while government evolves further and further into “Might is Right” totalitarianism.

The idea that a so called "Government" can simply write "law" confiscating private property without serious public consultation, creating alternatives, and compensation is LUNACY.

In addition, it is a clear abuse of power. The clear and obvious immediate beneficiaries are the Banks and large Institutions, because there is no way of unwinding existing bundled products without expending billions in software and computing costs, not to mention hurting clients.

Does anyone remember the convoluted "Super Surcharge" from the early 2000's, requiring enormous amounts of extra bureaucracy, individual calculations of ATI [Adjusted Taxable Income, etc]? Another boneheaded, costly, overcomplicated Treasury initiative... There were far easier, cheaper, less complicated solutions to a perceived political problem.

Although this may appear overly dramatic, this type of "Legislation” is the type of law which pushes people toward revolution and civil war. "Taxation Without Representation" was enough to start the American Revolutionary War. There have already been 16 documented suicides of Advisers.

4. The last really serious aspect [at least, to be outlined here!] of this perverted, corrupt "Legislation" is the reflection on our so called "Representatives".

How does this abomination of legislation and perversion of principle reflect on the politician’s ability to think, analyse, understand the legal, principled framework, and cascading consequences? Why are they "Going along to get along" with this corrupt abomination?

IMO, it is absolutely necessary to support the AIOFP "Constitutional Challenge", even if you think that there is justification for moving away from grandfathered commission. It is a FAR BIGGER social issue.

IMO, there is already an ongoing Australian Civil War of the Government and the ideologically driven "Public Service" against the citizenry - it just a question of how violent it is going to get.

Outstanding commentary and insight Davey Jones, I couldn't agree more.

Very well said. Similarly view Youtube: Doug Casey "We are on the cusp of civil war."

Where art thou Hedware, the government funded Union activist? Speaketh your wisdom.

To Davey's well written comment. There is no rational debate left, and yes I have gotten to that point as well with these people e.g. Hedware. I just don't care what they think or say. I don't because they never did care about rational debate. It is just activism and trouble making. On that last issue I point specifically to the CEO of Choice and his self description in his bio as a "Trouble Maker". Is that it mate? Is that all you amount to is a "Trouble Maker". How is that helpful? And how is it helpful that ASIC directly funds these "Trouble Makers" to the tune of tens of millions of dollars. Davey is exactly right. This is a FAR BIGGER social issue. Stop voting for the major parties.

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