Praemium chief executive, Anthony Wamsteker, is confident banks and superannuation funds won’t be able to get away with poor or conflicted financial advice despite recommendations to scrap best interest duty.
On Wednesday (8 February), Treasury’s 267-page Quality of Advice Review (QOA) was released, which recommended banks and super funds be allowed to provide advice without being subject to best interest duty.
Reviewer Michelle Levy’s recommendation was that best interest duty be replaced with an obligation to provide ‘good’ advice.
Commenting on the report, Praemium CEO Anthony Wamsteker said the banks never really exited the wealth management space.
“I don’t think they ever fully left, to be honest. I’m pretty sure all of the banks have private wealth advisers working for them,” Wamsteker said.
“The rules that have been put in place have helped some of the problems that occurred. The biggest thing you want to avoid is advisers acting in the interests of their employer instead of the client by putting the client into the employer’s product. That was the stuff that led to a lot of problems in the past. I don’t think that would happen again under the current regulatory regime,” he said.
“Right at the minute I think people are pretty clear that if you work for a super fund or bank, you are not just allowed to put customers into your employer’s suite of products without good reason.”
Last year, Levy defended her plan to allow product providers to give advice. Speaking at The AFR Super and Wealth Summit in November, she said there would never be enough advisers for everyone to get the advice they need.
“Advice is episodic, so we need a diversity of providers and the obvious candidates are the people that look after our money or lend us money,” she said.
“We know superannuation funds are giving advice.I would be saying they have a responsibility to be giving helpful advice to their members and likewise banks, insurance and investment managers.”
