In answers to questions on notice from the parliamentary joint committee on corporations and financial services, ASIC said the recent campaign conducted by industry funds to discourage early release of super fell under the legal definition of general advice and the regulator was not concerned about such a campaign misleading consumers.
“There are exemptions that can apply to the requirement to hold an AFS licence. Where an entity falls under an AFS licence exemption, they are generally exempted from conduct and disclosure obligations that AFS licensees are required to comply with when providing financial product advice,” ASIC stated.
“S911A(2)(eb) of the Corporations Act provides that entities providing general advice as part of a broadcasting service are exempt from the requirement to hold an AFS licence.”
Conversely, ASIC said it had taken action against real estate agents recommending tenants release their super early to pay their rent because this could be construed as advice from someone who had personal knowledge of the client’s situation, as opposed to a generalised campaign.
“Personal advice is financial product advice that is provided to a person in circumstances where the provider of the advice has considered the person’s individual circumstances or a reasonable person might expect that the provider has considered the person’s individual circumstances,” the regulator said.
“ASIC considered real estate agents writing to tenants, with knowledge of individual circumstances of tenants, could be deemed personal advice.”
In further responses around industry funds’ use of intra fund advice, the regulator also defended this type of advice as coming under scaled advice provisions, meaning in-house super fund advisers did not need to consider clients’ full circumstances.
“Retail clients rely on personal advice and may suffer significant loss if the advice is not of good quality. For this reason, there are specific legal obligations that apply to personal advice provided to retail clients,” ASIC said.
“Advice providers can give scaled advice (including intra fund advice) that is limited in scope that meets all these legal obligations. This is because what an advice provider must do to meet the legal requirements, including the best interests duty and related obligations, can be ‘scaled up’ or ‘scaled down’ depending on the nature of the advice.”
Super funds don’t have individual knowledge about people — only all their details except how much they spend as they know their income, super details and personal information. The people employed by ASIC can’t be this incompetent, it must be deliberate. Every time I think this profession isn’t completely broken I read something from ASIC or FASEA and realise it is a deliberate attempt by these bodies to have advisers leave the industry through any means necessary.
EVERY WEEK I TUNE IN TO FINANCIAL PLANNERS LIKE MYSELF VOICING THE UNFAIRNESS OF THE INDUSTRY FUND PONZI SCHEME. THE ANSWER IS TO FORM A LOBBY GROUP SO LOUD THAT IT GETS ON TO THE FRONT PAGE OF PAPERS. WE LL KNOW THE RORT. I AM WILLING TO START A FACEBOOK GROUP TO DO SOMETHING ABOUT THIS IV HAD A GUTFULL.
Wait what?
ASIC essentially essentially admitting to two separate sets of rules.
I thought the Royal Commission aimed to get rid of carve-outs and exemptions.
Regulation in Australia is a joke.
ASIC are keen for KPMG to shape their policy position to allow the intrafund fee racket to continue – while shafting the businesses of retail advisers as much as possible
Paul Howes is KMPG head of Super, and we know his background is ISA.
ASIC is corrupt. What a sick joke. Also, please note EVERYONE…. advisers are too scared to comment on LinkedIn in relation to things like this as ASIC will target you and destroy you (similar to what powerful Communist governments or dictators do). Note how all the great articles on LinkedIn don’t get many likes from the people who are “exposed” to ASIC’s retaliation. There is true corrupt behaviour at play in this country and our industry and financial advisers are truely scared and under threat from ASIC and in some cases their licensee (think of what AMP is doing to their tied advisers!)
Government (Libs or Labour?) please help! Jane Hume? Scott?
Kate Carnell, please?
i does not help when CEO’s of AFSL’s also lash at Jane Hulm….
This then would mean all retail funds should become industry funds. There’s no difference all super funds have fee’s associated in any event.
Industry funds have political power. Advisers …. don’t and won’t until there is individual licensing.
individual licensing will not change any political outcomes. Getting out of the major advocacy groups that are sending you broke is the only way you will achieve that
The fact that you need to rely on legislative wording to defend a business model already shows some form of circumventing the law. FASEA Code Standard 1 anyone?
Dear ASIC, if a super fund knows so little about their members, how are they demonstrating compliance with their duties as Trustee?
i love industry super funds, They are NOT transparent. They put conservative members in Growth asset allocations, they wont let private advisers help their members..life insurance has limits……LOVLEY = NOT.
This is a prime example of why this industry will never be a profession.
Under the “intra fund advice” – you can apparently provide retirement/ TTR, salary sacrifice, rollover and investment advice. For “wholesale investors” no FSG, SOA etc.
Why have FARSA if a large proportion of “advisers” can simply ignore it??
well we obviously need scale and compliance relief, and where our advice does not involve product. WTF are you doing about it ASIC ? hello bueller …..
I’m confused.
961B(1)(2) applies to all advisers.
Is this saying that Intrafund advice gets tested on 961B(1) alone and everyone else gets tested on 961B(1) and 961B(2)?
With 961B(2) – if it can’t be demonstrated in the file, then it didn’t happen and/or wasn’t considered by the adviser. This leads to all sorts of issues with compliance, remedial action etc etc.
What is the focus here? Process and outcome, or just outcome?
If it’s just outcome for some and not process and outcome for all then this appears to be deeply flawed.
I’m lost……
Absolute Rubbish, a Industry Fund has way more information on a clients circumstances than a Real Estate agent, the General Advice relief provisions do not apply and under the FASEA Code you have to consider the broader interests of the client. Quite simply if ASIC come knocking on our door we will use the same General Advice relief as provided under the Act, if FASEA comes knocking we have a very different issue all together.
Legal & political (PC) maneuvering at best
CORRUPT ASIC & INDUSTRY SUPER – the complete bias and corruption ASIC allow Industry Super to do whatever the hell they like whilst ASIC systematically kills Real World Adviser has moved soooooooooooooooo far past a complete and utter joke.
[b]ADVISERS MUST REVOLT AGAINST ASIC !!!!!!!!!!!!!!!!!!!!!!![/b][b][/b]
Yes advisers need to revolt because our useless AFA and FPA do nothing!!! (except Phil Anderson, I do like him and he did put up some excellent info once against the removal of “contracted” Grand Fathered commisions).
What the bloody hell is wrong with Advisers??????????? Profession???? NO I don’t think so because we can’t even organize to defend ourselves!!
So an industry fund would have date of birth , super fund balances, spouse and children details ( insurance ) , income based on contributions, work history -length of employment from contributions from employer(s) which is more than a real estate would have – so what is the difference – OH I forgot one is a protected species. At any rate both are giving advise!!!
You are absolutely right mytops. Industry funds have many more personal details than Estate Agents.
What an absolute joke! ASIC is a disgrace.
Because Industry Super funds no nothing about their members – right???
That sounds sensible……….if you’re a superannuation provider looking to flog your own product that is
Simple – ASIC defends Industry Funds.
I just want to know how the FASEA regime would assess ASIC’s judgement? This is very confused! FASEA asks us to consider everything while ASIC tells us that we can scale up or down.
They are simply untouchable. ASIC needs to act in ALL members best interests too!
Unbelievable. This industry (at all levels) is in a mess.
Yes, this is unbelievable. This type of thinking would trap anyone talking to a friend at a BBQ. It hardly constitutes advice. A big mess indeed.
No truer words…