The research from ASIC’s Report 642 involved in-depth interviews with 50 consumers who had all received personal advice to purchase timeshare membership from one of the five main points-based timeshare operators in Australia – Accor Vacation Club, Classic Clubs, Marriott Vacation Club, Ultiqa and Wyndham.
The report explore consumers’ experiences with timeshare from the initial approach and sale through to membership use and the exit process.
It found that, while some research participants were satisfied with their timeshare membership, there was a high level of discontent overall.
ASIC noted that many consumers felt that they were not getting the expected value from their membership and that they had experienced financial stress because of unexpected changes to membership fees or, in some cases, to their personal circumstances.
Further, ASIC also undertook a targeted review of a small sample (20 pieces) of personal timeshare advice provided to consumers between August 2018 and June 2019.
Following the review of the sample, ASIC said it specifically found:
- an imbalance of information – purported benefits were promoted without equal or appropriate prominence to risks, such as illiquidity, ongoing fees, long-term contracts, required booking periods and availability of accommodation;
- inadequate inquiries to determine whether the client could afford the financial commitments, at the time the advice was given and for the period of membership;
- inadequate inquiries into client objectives, particularly their interest in saving money on their holiday accommodation costs;
- inadequate inquiries into reasonably foreseeable changes to clients’ circumstances and the ongoing appropriateness of the timeshare membership; and
- documentation showing a template advice process.
ASIC commissioner Danielle Press noted the role financial advisers play in the sale of timeshare products, saying they must comply with the law and put their clients’ interests first when providing personal advice.
“Timeshare operators need to ensure the way they design and sell their products, provide services and respond to complaints, leads to good outcomes for their members,” Ms Press said.
“We will take action to address mis-selling, poor advice or lending practices that result in significant financial loss to consumers.”
In addition, Ms Press said ASIC is considering regulatory options to deal with the identified consumer harms and reconsidering the policy settings to improve consumer outcomes.
“We are focusing on issues such as the ability for consumers to have their timeshare application voided where it is subject to obtaining finance but finance is not approved or the consumer decides not to proceed with the finance application, exit arrangements for consumers facing hardship and other measures to address consumer harms in this sector,” Ms Press said.
I have had time share for sixteen years use it correctly and will not any salesman contact me but they do and they are nothing but lying thugs and wyndham just turns a blind eye to what this thieves say to people who have no idea what there signing up for
I recently had a client who was contemplating a US time share ‘Investment’. Whoever was flogging it was recommending it as an investment in their SMSF! Don’t think so.
Take it easy fellow planners. Time share is a type of managed fund and you have to be licensed to sell them – not that any of us would ever touch this stuff. Time share sales people are licensed.
I read it differently to others below. What I see is…
– ASIC putting it on notice that Timeshare operators better be careful about what they say because it could be viewed as personal advice.
– I read that Ms Press commented about Timeshare operators, not advisers.
– I wonder if Adrian Flores is just using some creative angles to make it look like ASIC are focusing on financial advisers in this story just to get advisers even more worked up about how hard things are.
I haven’t read the research report or the press release – it’s not important enough today to go and investigate it, but counsel my fellow adviser to perhaps check the source before concluding that ASIC, is yet again, out to get us.
Any truth to what I’m saying Adrian? Or have I got this wrong and ASIC is genuinely talking to financial advisers about this issue?
You will not get a reply
Maybe an article about staff at ASIC acting like investigators would be a valid reply – most results seems to be handed to theM or a result of criminal action where they find out and ban these people – another Result without the real work – mean while the banks senior staff are left alone!,
Agree with everyone here. I have been an adviser for over 15 years across multiple firms and have never heard of anyone recommending timeshare. Next we will be told not to recommend pyramid selling opportunities!
ASIC have sunken to the point where if something is remotely financial and may lead to poor outcomes then just blame it on the IFA’s anyway because we’ve copped it for everything else so what’s one more??
Timeshares are flogged by telephone sales persons not advisers. They do not produce a Statement of Advice or make any attempt to adhere to best interest duties. To say that advisers are involved is just another example of ASIC trying to bad mouth advisers despite it having nothing to do with them whatsoever. Sort of sounds like the “advice” provided by the union fund call centres which have very big impacts on clients yet they get a carve out on SOA and BID requirements too!
“just another example of ASIC trying to bad mouth advisers” or is Adrian just making it look that way?
Jesus…. How is this still happening?
Which advisers are selling timeshare? I’ve never heard nor seen this in the 20 years I’ve been advising.
There”s ~50 Accredited on the Asic Financial Advice Register. The Accreditation falls under Managed Investment Schemes, they’re from groups (like the article mentioned) such as Wyndham, Classic Holiday Club and APVC. It’s very fringe financial advice and reeks of dodge, and yes, they call themselves ‘financial advisers’.
First I have ever heard in 30 years of TS as part of a financial or investment strategy. For a financial adviser to sell it would need to be on APL so would love to see a list of the Licensees that have these on their APL. Would also like to know how PI insurers sit with this at claim time. TS not an advice category that I am aware under adviser authorities. One step away from written property advice for real estate agents???
Happy to confirm timeshare products are not on my APL.
ASIC should be more vigilant on promoters of these schemes along with promoters targeting ‘sophisticated investors’!
Just shows how out of focus senior staff can be at ASIC Financial Advisers??? First I have heard of it also Suppose it helps their KPI’s
Advisers selling timeshare? First i’ve heard of it. Is there anything ASIC won’t blame us for!
Timeshare? An investment? You gotta be kidding me…..
i think ASIC get confused by their own laws