The degree to which the Australian Securities and Investments Commission (ASIC) has used its powers to eliminate the payment of commissions to financial advisers by superannuation funds has been revealed by its latest review of regulatory relief applications.
The ASIC document has revealed that while the regulator was prepared to grant disclosure relief with respect to transfers between superannuation funds with the same trustee, it used the process to oblige the superannuation fund to act on commissions.
The regulator said it had provided an extension of relief to the superannuation on the basis that while the transfer involved a change of fund for the member, the member would still subsequently hold a superannuation that contained substantially the same rights and features.
However, one of the conditions ASIC saw fit to impose conditions on the superannuation fund related to commissions and the ability of adviser clients to end those arrangements without having to first contact the adviser.
“We also imposed further conditions to relief under the extension so that the trustee must: (a) provide members whose accounts are charged commissions with a notice to highlight the trustee’s arrangements under which members may give a direction to the trustee that it immediately cease charging commissions without any need for the member to contact the person to whom the commissions are being paid; and (b) further highlight those arrangements prominently on its website.”
Comments
ASIC could give the Soviet Union lessons on Totalitarianism.
What a great way to destroy many businesses who had done the right thing by their clients by provided ongoing advice and service.
That old chestnut of fee for service V's commission is a crock.
Both are unacceptable and conflicted forms of remuneration, when abused.
the last time I checked it was not illegal to have a business that generated income from grandfathered commissions. Why is it, that I am now being portrayed like a criminal?
Would a point of order be here to highlight the fact that a product commission is not a charge made by the adviser, it was an inbuilt product/investment manager fee, which was fully disclosed in the PDS issued at the time, and contractually accepted by the client?
ASIC has proven itself time after time to be nothing more than an aggressive back yard bully, that deserves no respect.
ASIC is the worst regulator you can have. that's why financial planning looks like an atom bomb of shit went off on it.
add to those greedy institutions and limp professional bodies, you have the nightmare that is our industry
what all of them haven't factored for in all this mess is the number of good advisers who are packing it in and leaving, the exodus hasn't really begun but it will begin latter half of this year
in the last 12 months asic approved 3 limited licenses, so accountants are leaving in droves, and so are financial planners
other than the idiot who will respond to my post by saying I will try, who is going to be left after this debacle to provide clients advice? and that too at such a crucial time in our history where the baby boomers are retiring en masse and passing on billions to the next generation
it's criminal what these incompetent morons are doing to millions of Australians who desperately need advice but will not be able to get it.
ASIC have been at the very forefront of enforced and manipulated strategy in order to push their intended outcome over many years.
ASIC's intervention and over-arching, domineering control in relation to OnePath's superannuation member correspondence last year was way above acceptable at any level.
In discussion with a OnePath employee last year, it was made very, very clear that when ASIC walk into the room and say " jump ", it is a matter of " how high " with no questions asked.
OnePath had already sent out clear concise correspondence to all members in relation to the members being able to turn off adviser commission payments.
The response numbers from the members coming back to OnePath was low and not acceptable to ASIC and so they demanded that OnePath again re-word all correspondence strongly again emphasizing that the member could turn off the adviser commission payment and it was stated by a OnePath insider that the letter was not to leave the building until ASIC had given their approval on the clarity of the wording.
They are drunk with power and resources and are using every conceivable option to go beyond reasonable and beyond legislation in order to pressure providers into moving prior to legislative change is effected and governing by fear.
If anyone doesn't believe that ASIC had intervention and influence with the re-working and re-wording of FASEA Standard 3 in order to assist their strategy of having insurance commissions and asset based fees eliminated, then it's time to think again.
This is not a case of the regulator administering legislation, this is a case of the regulator steering and influencing legislation in order to achieve the outcome they want.
This is not a case of the Govt being in control of the regulator, but entirely the reverse.
Spot on. This is exactly what investigative journalists should be looking at in the major papers. ASIC is completely out of control. The vast majority of the so-called 'fees for no service' scandal is not a matter of clients being unhappy with their service, or clients receiving no service - we are talking about financial service providers, who deliver a service which consumers highly value and are satisfied in, being bullied into submission by ASIC to the point where they feel it is easier to refund everything to the customer and shut their doors, even though the consumers are satisfied with the service. This is Australia for gods sake! What has happened to this country?
Not the first time ASIC has done something stupid like this. Remember the debacle that is the SoA? ASIC went way beyond the law in its regulations then. And btw, FPA rolled over to get its tummy tickled way back then too. That's nearly 20 years ago. AND NOW I HAVE TO PAY ASIC TO DO THIS STUFF. Not any more.
This idea was something that I put forward way back in the years when commission was being considered for banning.
Clients should always have been told - at every conceivable communication - that there as a commission being paid to an adviser and that the commission could be terminated at any time. That would have fulfilled an awful lot, and reduced the need for this position we now find ourselves in. And just in case anyone is in doubt about the position we find ourselves in...
A regulator is directly cancelling income and terminating contracts and taking away property when the contracts themselves remain legally valid.
One day, this will be seen as an amazing example of government over-reach. Again - the idea is good. It's just ridiculously late, and should have been done a very long time ago. Right now, it's just an unethical roughshod ride over anyone holding those contracts.
Ethics in this environment is a very slipper thing indeed. I can't help but wonder why the same ideological heavy-weights have failed to eradicate vertical integration - or restricted APL's - or the conflict-fraught AFSL licencing regime? I have encountered advisers flogging products using perfectly conforming fixed service fee arrangements. Ethics is not something isolated to grandfathered commissions or percentage fees, folks.
AS a planner, It so depressing hearing someone with so much knowledge in the industry , as Michael, hit the nail on the head while all the policy makers pat themselves on the back for this almighty F##k up and sell it as a wonderful thing for everyday citizens(voters).It not on just terms, it never was and never will be.
Add new comment