No-advice charges highlight deep seated conflicts: ISA
Industry Super Australia (ISA) has stated that claims major banks charged fees for financial advice without providing any advice demonstrates they irreconcilably conflicted and act to the detriment of consumers.
ISA made the comments following news that the Australian Securities and Investments Commission (ASIC) was continuing its investigation into the advice arms of larger licensee, including the major banks, and had found numerous instances of advice being charged for but not provided.
ANZ also admitted it had been engaged in this type of behaviour and would be refunding $30 million back to clients who did not receive documented annual reviews between 2006 and 2013 through its Prime Access advice program.
ISA stated that it was ‘staggering' that the banks had spent much of the past 18 months trying to unwind consumer protections by opposing the opt-in provisions of the Future of Financial Advice reforms, which would prevent the behaviour identified by ASIC and by seeking to change the default superannuation regime currently in place.
ISA stated these latter efforts were continuing "despite investigations by regulators into the practice of banks bundling up business banking services for employers with default superannuation arrangements for employees".
"It is a further example that the vertically integrated banking model creates irreconcilable conflicts of interests often to the detriment of consumers."
"These ongoing scandals and investigations raise obvious concerns about the culture and governance of the financial advice and superannuation divisions of the major banks."
AUTHOR
Jason Spits
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