ASIC hits AMP and banks over laggard approach to fee for no service

AMP and the major banks have taken to long to conduct follow-up reviews into fee for no service, according to the Australian Securities and Investments Commission (ASIC).

The regulator has released an update on what were supposed to be further reviews undertaken by AMP, ANZ, the Commonwealth Bank, National Australia Bank (NAB) and Westpac claiming that most of the institutions are yet to complete the exercise beyond what was carried out in 2013.

Commenting on the finding, ASIC Commissioner, Danielle Press said the institutions had taken too long to conduct the reviews and welcomed the Government’s commitment to give ASIC new directions powers that could speed up remediation programs in the future.

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“These reviews have been unreasonably delayed,” she said. “ASIC acknowledges that they are large scale reviews – they relate to systemic failures over long periods with reviews going back six to 10 years and cover 36 licensees from the six institutions that currently authorise more than 7,000 advisers.  However, we believe the institutions have failed to sufficiently prioritise and resource their reviews, particularly as ASIC advised them to commence the reviews in mid-2015 or early 2016.”

“We are pleased the Government has agreed to adopt recommendations from the 2017 ASIC Enforcement Review Taskforce Report, which includes a directions power. This would allow ASIC to direct AFS licensees to establish suitable customer review and compensation programs,” she said.

Press said the main reasons given by the institutions for the delays were poor record keeping, a failure to propose reasonable customer-centric methodologies and an overly legalistic approach.



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"ASIC advised them to commence the reviews in mid-2015 or early 2016".
So when was it?
And, from my understanding, ASIC has some very unreasonable definitions on service - namely excluding service which seems to have been a sticking point and may have caused some of the delays.

slap them with some wet toilet paper

How is JBWere? This is what they said to ASIC.
"JBWere advised ASIC that its customers did not pay fees for an annual review"
What on earth does the 1% per annum pay for then? Or do they just classify them as wholesale and move on.
Give me a break!

Yes probably declare Wholesale, or declare Investment Advice only - it all will come down to what is in those Service Agreements and the legal interpretation - the argy bargy could go on for years. The regulators really just want everyone to cut some cheques, pretend NO service was ever delivered, wipe out an industry and start afresh. And Labour will support that, because it helps the industry funds. So screwed.

If they seriously go back 10 years and ask for refunds, and then advisers are pursued for these refunds by the dealer, they may as well close the show down now - every adviser will have remediation to pay. Many if not most, AFSL's advised their advisers that a Letter of Offer was sufficient. They are all now saying it wasn't but practiced on that basis for years. AFSL's often control adviser payments, so they will garnishee these and make it very difficult for advisers to jump ship - it's going to get ugly.

Looks like the big boys will have the last laugh. They must be in the big boardrooms laughing the advisers/intermediaries and their clients. Shocking that they can get away with it, but then what did you expect? Tell the truth? Act with honesty and integrity? Act in the best interest of a client. They had one agenda and one agenda only. Having once worked for the big groups in product design and strategy, the whole model was based around the annuitised income that can be generated for the home office. Annuity income was king.

Do you base that on the view they will just smash advisers for the remediation refunds, and they keep the product rem anyway, that makes sense.

Bozo, that is what I have based it on, look at the form guide what they have exhibited already. Another way of looking at - Do you believe the big groups look scared or threatened in taking any drastic action or significant change of behaviour other than preparing a lot of press releases. Board directors and senior management just resign with no action at the present time - if it was a captain of a boat or plane - they sty with the plane or ship and do not desert the passengers.

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