The Australian Securities and Investments Commission (ASIC) has observed that more firms were scrutinising the fees they were charging their clients, following the Future of Financial Advice (FOFA) reforms and fee disclosure statement requirements.
Speaking at the Association of Financial Advisers' 2015 National Adviser Conference in Cairns earlier this week, ASIC deputy chair, Peter Kell said the financial advice industry had charged an "ocean of passive fees" in the past, where clients paid for services that ultimately were not provided and this was one of the unsavoury aspects of the industry.
"ANZ has made an announcement, and I don't think they will be the last one, where ANZ has now progressed the fact that it's not consistent for the profession to be charging people for services, for advice that ultimately doesn't get to them," Kell said.
Referring to the results of industry reforms, Kell said ASIC had witnessed a shift due to its financial adviser register, saying that around 22,500 advisers were on the register, and it had seen over 300,000 searches since it was introduced in March.
"Also, what we're seeing is that firms are now coming to ASIC, and I suspect talking to each other, saying: ‘Well, we've had a problem with that adviser. We're either going to have to breach report them or we have real concerns about their behaviour'," he said.
Firms were having discussions amongst themselves and with the regulator to ensure advisers were not repeat offenders, he said.
This was considerably different to the past, where it would be impossible to track down the ‘bad apple' advisers, as firms would have moved them on to other companies.
Kell also said advisers needed to think about how they positioned themselves, and should refer to their "practice" and "profession", rather than their "business".
"You'd never hear a lawyer saying they run a business or a doctor talking about their business," he said.