Was ‘fair exchange of value’ fee for no service?
The concept of “fair exchange of value” has been aired at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in the context of National Australia Bank (NAB) seeking to retain adviser fees in relation to superannuation fund members not actually receiving advice.
The former chair of the MLC Superannuation trustee, NULIS, Nicole Smith confirmed that a paper had been developed seeking to justify the “fair exchange of value” concept and that this had been opposed by the Australian Securities and Investments Commission (ASIC).
Under questioning from counsel assisting the commission, Michael Hodge QC, Smith agreed that the concept was based on the banking group agreeing to provide a service and could therefore justify keeping fees.
Smith said she was aware of ASIC’s concerns with respect to the proposition amounting to fee for no service and agreed with ASIC on the issue.
The Royal Commission was told that the issue of “fair exchange of value” was being contemplated within NAB/MLC as recently as late last year and January, this year.
Recommended for you
AZ NGA has entered into a strategic partnership with national advice firm MiQ Private Wealth, as a way to provide a succession solution, as well as career development opportunities for staff.
While the advice profession struggles under growing operating costs, Adviser Ratings has found more than half of practices – some 58 per cent – that generate less than $250,000 in revenue report no profit at all.
The Federal Court has ordered the freezing of assets and the appointment of receivers to two entities linked to Australian Fiduciaries, ASIC’s latest move in an ongoing investigation into the company’s managed investment schemes.
Off the back of the August adviser exam results, the profession has seen 17 new entrants hit the Financial Adviser Register (FAR) this week, helping numbers return to positive territory.
