Addressing the ASFA virtual conference on Friday, ASIC commissioner Danielle Press said super funds’ responsibility to provide proper advice to members would become more pronounced as the retail advice industry shrunk in response to regulatory change.
“The challenges associated with the current advice framework and the reforms and structural changes mean there’s a risk consumers that have advice needs will not be able to meet those, so super funds can play an important role in providing that advice,” Ms Press said.
“But it must be provided in a compliant manner. The recent High Court decision on Westpac provides a clear delineation between personal and general advice, so I encourage trustees to ensure they’re not inadvertently providing personal advice without adhering to the best interest duty and other obligations triggered by personal advice.”
The decision handed down earlier this month saw the High Court dismiss Westpac’s appeal around a case brought by the corporate regulator relating to a telephone campaign conducted by the major bank between 2013 and 2016, encouraging members to consolidate their super into their BT fund.
The case was originally won by Westpac in the Federal Court in 2019, but ASIC won an appeal to the full court later that year when it was found the bank’s staff had given personal advice in the majority of the calls, without conducting the proper product comparisons required.
Ms Press said the regulator would “take enforcement action where it’s necessary to protect consumers” when it came to super fund advice, but also flagged such action may not necessarily encompass litigation, in what could be seen as a softening of ASIC’s tough stance under outgoing chair James Shipton.
“[Litigation] is an important component of our approach to compliance, but it’s coupled with the entire regulatory toolkit,” she said.
“That means we won’t necessarily be looking to make enforcement only through the courts.”
unless you’re union based super, in which case you can no wrong by ASIC.
ASIC is corrupt.
Agree, there seems to be 2 rules in the market place. I think we should not just talk about it but do something such as. If we “the FP industry” see examples of an industry funds intra-advice which has weakened the client’s position report each case to a central body (such as the AFA). Once we as an FP industry have a strong enough case present it to the powers to try and make a change. If they ignore us, investigate our other fairness paths.
What is means is that IntraFund Advice IS personal advice. ASIC has said so. Therefore, it needs to be regulated exactly like retail advice. Including annual opt ins & informed consent. There is no excuses now, given this ruling has been handed down.
Danielle Press just said these people need personal advice but make sure you keep call it general ok then we will open the scope of that to include all areas of advice coming soon “we have to fill the gap we just created”…. but guys just make sure you call it general ok best thing is you don’t have to compare anything keep keep the client where they are no worries also don’t worry about fee for no service we will green light intra fund fees fees or just keep ignoring advisers. We got your back too if people start to use more and more of the service just put your admin fee up ok no worries
“The challenges associated with the current advice framework and the reforms and structural changes mean there’s a risk consumers that have advice needs will not be able to meet those, “But it must be provided in a compliant manner. The recent High Court decision on Westpac provides a clear delineation between personal and general advice
ASIC Quote “so I encourage trustees to ensure they’re not inadvertently providing personal advice” Pigs might fly. Only last week the CEO of CareSuper put a submission to ASIC suggesting intra-fund advice be opened up further. And will that be PERSONAL ADVICE or ASICs favourite GENERAL ADVICE! Confusion abounds !!
All funds on notice, well except their mates the union funds, they can continue to do what they want unchecked. It is also true they are softening their stance on litigation. Apparently you can steal money for personal tax advice and other personal expenses and not be prosecuted, you just have to work at ASIC to get this sweet deal.
Just a correction in your comment . You don’t have to steal money for personal tax advice at ASIC
LOL, yet they are even look in the general direction of Industry Funds.
Sure, leave the litigation to small advisers and take a lighter approach with those big funds who can tie you up in courts for years
Sounds like – keep at it Industry Super – even if we do catch you, we have stated to Parliament that we see no possible way it can cause consumer harm, if we do catch you, then we will look for consumer harm, which ASIC will likely not find, and even if they do, no court action? Is that the situation ASIC and Ms Press?
Will ASIC be doing the same with Industry funds? Somehow I don’t think so.
They are softening their stance because banks /retail funds have exited financial advice and only their friends, the industry funds remain. What I find interesting is the comment from Press regarding super funds stepping in to fill the financial advice void. Seems they have already made a decision about the delivery of affordable advice. As I suspected, the so-called consultation is really just a con job to appear helpful, but ultimately deliver even more relaxation of regulations to conflicted, industry fund salespeople who masquerade as financial advisers. Our regulator is completely broken.
Useful words though no action has followed even though there may be large numbers of substantial breaches every day.
I think this should put mortgage brokers on notice as well. Makes it hard to argue they are not providing personal advice when selling insurances to their customers after providing a loan. Given the brokers use client’s personal information and a lot of them advertise they provide insurances, it will be hard to argue ‘general advice’ was provided going forward.
Excellent point Warren. These days mortgage brokers have to do a comprehensive Fact Find similar to financial advisers before they can recommend a loan. Given that they have all that personal information, most consumers would reasonably assume the broker is taking it into account when they “suggest” purchasing insurance through their aligned provider. Sorry mortgage brokers but no matter how you spin it, that’s unlicensed personal advice.
Many mortgage brokers go even further, and imply that purchasing their insurance is a prerequisite to getting a loan. ASIC needs to take a long hard at look at what mortgage brokers are doing in the insurance space.
Will never understand how they can sell their ALI loan protection without advice, qualifications, personal advice, or adhering to any rules authorised reps have to follow.