Addressing ASIC during a joint parliamentary committee hearing on corporations and financial services on Wednesday, Mr van Manen – a former financial adviser – asked the regulator to consult with advisers in the life insurance sector.
Responding to Mr van Manen, ASIC deputy chair Peter Kell confirmed advisers groups would be consulted with during the industry-wide review.
However, Mr van Manen believes that the regulator should look beyond industry groups.
“With the greatest respect to the groups, they’ve substantially let down their membership over the last 12 to 18 months,” he said.
“I’ve not [held back] in coming forward in saying that – but look past the groups and actually get some people from practices that do this stuff day to day.”
Mr Kell said the regulator would consult with a wide group of “industry experts” which, from ASIC’s perspective, would include “some practitioners”.
During the hearing, Mr van Manen also questioned whether there is any requirement for super funds to disclose the level of commission they receive from insurance companies.
In response, ASIC commissioner Greg Tanzer said the he believes the answer is “no”.
“If that is correct, then why is that not the case when everybody else has to disclose what their remuneration is?” Mr van Manen asked.
Mr Tanzer said the regulator would have to take that question on notice; however, he did stipulate that ASIC does conduct a “range of surveillance programs” in respect to disclosure made within superannuation.
“Some of that does go to insurance. It certainly has a substantial focus on fees and costs and insurance is a part of that,” he said.
ASIC will do nothing about Industry Funds because they and Choice are all in bed together. Choice and ASIC have swapped staff (that’s where Kell came from) and they agree with IFA (privately) that commissions on risk have to go. I’ll bet that lots of off the record meetings go on between these three.
IFA can and do make ridiculous and false statements but do ASIC ever pull them up? Of course not. It’s all part of the plan to discredit advisers. IFA have a lot to gain in market share. We know that if advisers all disappeared today, IFA would not get any more market share because insurance has to be sold. They of course in there megalomaniac ideology don’t really care about people being protected, they just want to ensure they get all there is.
Ask yourself why industry insurance premiums so high and definitions so bad. Its because their claims were so high they were missing out on their millions in profit share. If they were doing the job they purport publicly to do, they would be looking to use their market strength to improve definitions, not embrace the poor definitions they have.
ASIC needs to conduct an inquiry into industry funds and the IFA which being a private company has got no oversight. Industry fund members have a right to know how much of there money goes into the IFA and what they do with it.
Will ASIC do the right thing? Not a chance! Advisers are too soft a target.
If I had a magic wand when it comes to Industry Funds I would prevent them blindly rolling over super accounts into their own, without providing advice on the potential for adverse effects of cancelling insurance. I have recently had to intervene to stop a roll over and cancellation of insurance when a new client had decided to roll over and consolidate his accounts. Even where a person does not seek our advice Best Practice says we must intervene to prevent potential loss of benefits.
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I suggested this very point to one of the deputy commissioners assistants several years ago. Firstly she thought ASIC could not possibly be doing a better job than they are now. I managed not to burst out laughing in her face…only just. Secondly she was concerned about how to find these people – I said just advertise in the FP rags/blogs etc for interested parties, she said where would we get the money??? Seriously….. She then went on to explain to me how FDS’s and Opt In, despite one being on 2 years and one annual, AND they have to issue an FDS with the opt in and, at the time, only had 30 days with which to do so was so easy to manage with a several hundred client data base. We didn’t discuss just sourcing all the revenue sources to one client account.
She was so completely clueless about what is going on, thought ASIC was perfect and an FP’s lot was just so easy.
I struggled to control the bile in my throat.
I had gone there to suggest a more collaborative approach, work with true professionals and not the lowest 1-2% that they deal with, and make the provision of advice better for the whole community, professionals, regulators and of course the clients.
Obviously I have no idea and ASIC is perfect so I guess I should be comforted by that!
the “advisers groups” are the ones who did as they were told because they are funded by FSC! Their time is over.
ASIC clearly remains absolutely clueless, and their ineptitude will continue to help wreck the industry until all advice will be from product providers with pretend APL’s. Consumers and small business are the only losers in this debacle.