Addressing the SMSF Association National Conference 2021 last week, ASIC commissioner Danielle Press said the regulator’s Consultation Paper 332 on reducing barriers to affordable advice had received over 480 submissions.
She said the majority of those received had come from advisers and the accounting profession, and common themes were beginning to become apparent when it came to problems with advice delivery.
“The SMSF Association has commented that the current advice process is too lengthy and prioritises the needs of the licensee over the consumer,” Ms Press said.
“This is consistent with the themes we have seen emerge through other submissions.”
Following the collation of submissions to the consultation, Ms Press said the regulator would seek to hold roundtables with key industry groups and licensees in the first quarter of the year, to dig deeper into the issues raised in their submissions and potential solutions.
Crackdown on unlicensed advice
Following enforcement action taken around unlicensed advice given by real estate agents at the height of the COVID pandemic, Ms Press said ASIC had adopted a more significant focus on inappropriate advice being given by those not caught by the licensing regime.
“Last year we became concerned about the possibility of increasing levels of unlicensed advice as operators looked to take advantage of vulnerable consumers during the COVID pandemic,” she said.
Ms Press said ASIC had established an unlicensed advice working party to identify and investigate incidents of suspected advice being provided by unlicensed entities.
“In some cases, ASIC will write to entities that may be engaging in unlicensed conduct and may be unaware of the need for a licence to warn them of potential consequences,” she said.
“In other cases, ASIC continues to investigate and will take enforcement action where it’s required.”
It is important to download as much of their report as possible & quote it back to them for years to come. Don’t let these regulatory business killers off the hook.
I can sense we have another bit of BS to put in the SOA…………
What are the odds we will need to put a disclaimer in about why we didn’t provide scaled advice.
Just don’t rely on authorisation/confirmation by your Dealer Group for any compliance matters. I know of one who’s facing a banning order because they asked for the opinion, advice and confirmation of their Dealer Group’s CEO and their Head of Compliance on the process and structuring of things including Opt-Ins, FDSes and even several SoAs to be told that “yes they’re okay” to now be told by the “experts” at ASIC that that’s not okay at all and it’s the individual AR’s responsibility to understand the legislation themselves, and they shouldn’t rely on sign-off by a Dealer Group. Penalties to the Dealer Group: Nil. Penalties to the Adviser for relying on the group they were paying thousands of dollars a year to: most likely their entire career, home and future. The same will happen with “Affordable Advice” – ASIC will say one thing, Dealer Groups will add an extra layer of “protection” and the Adviser will still get their *** handed to them on the whim of a power-hungry ASIC analyst and (“un”)biased delegate.
Asic are going to sit down with Consumer Groups and Licensees???? Isn’t that what led to the current issues. Try sitting down with experienced advisers who made submissions instead.
It would appear ASIC is sitting down (and perhaps lying down) with Consumer Groups and Licensees far too often.
So they will hold a round table with some of the biggest unethical business operators in the game. Sounds good to me.
I note they are planning to hold consultations with ‘key industry groups and licensees’. What about consulting with financial planners? Surely 90% of the work should involve consulting with the people who are doing the work. Imagine doing this sort of research in the medical, legal or accounting professions, without actually consulting with practicing professionals. There would be outrage. ASIC have truly lost their way.
Financial planning will never become a true profession whilst product floggers continue to influence advice policy.
If you think the current state of play is serving the public well, you have an odd view of the world. Perhaps you like the public paying massive fees for advice ?
Agreed. Just wait for the solution to bring back an Accountants exemption etc to advise on super contributions etc… No reduction in red tape for holistic financial planning which is what most people actual require.
How about the unlicensed advice given by some quite well known authors? Apparently though if it’s in a book it’s not considered advice regardless of the fact the readers take it as such and act on it. Similarly if a TV presenter who’s unlicensed to give financial advice gives advice to hundreds of thousands of viewers, it doesn’t seem to be a problem either?!
Agreed. I had a person tell me the other day that they had moved super to the exact option stated in that book I am sure you are alluding to. Not to mention they were once on the payroll at that fund.
Spot on.TV presenters would never deliver legal, medical or accounting advice. they would invite a trained, licensed professional onto the show for comment. But they know our lame-duck regulator couldn’t care less and is more interested in defaming our profession and using their power to frighten vulnerable licensees and small businesses
ASIC will wind up a smaller operator but it seems the big licensees are “too big to fail”
ASIC will attack a licensed operator with the full force of the law as long as they are not too big
Meanwhile, mortgage brokers engage in unlicensed advice, real estate agents do the same, “wealth coaches” do the same and on it goes
However, going to the expense of getting a license and doing the right thing means we are spending a lot of money and attracting attention from ASIC while having to compete with unlicensed operators who seemingly go unnoticed.
The “Wealth through Property” seminar operators are so brazen they actually advertise on TV with impunity!
Thanks ASIC for writing to the people giving unlicensed advice and warning them of the consequences. Im sure the letter will say
“Everyone other than qualified financial advisers is able to give advice on anything without any fear of repraisal from ASIC. If you would like to get punished and sued and charged for the privilage, please go to univestity for 3 years to complete a financial planning degree, do 60 hours of compulsory training a yeart (more than twice what doctors must do), complete an ethics course, pay 10% of your revenue to a dealer group, spend $12 on Professional Indemnity insurance and document all advice in a Statement of advice which will take you a day to complete and never be looked at by anoyne other than ASIC. The fee for this privilage is $1,200 per year.
ASIC in our infinite wisdom has deemed financial advisers to be unethical whilst mortgage brokers, accountants, LAWYERS, BANKERS, university professors and especially the managers at ASIC to be totally ethical and so only financial advisers must do a FASEA ethics course. ASIC believes that senoiur staff are allowed to rip off the tax payer and give themselves hundreds of thusands of dollars for whatever they wish is totally fine because we are charging financial advisers for it anyway.”
I think the fee is $1,570 per annum.
Please don’t just have roundtables with the usual large licensees and industry groups. They do not represent small business financial planners and their clients, they only represent their own self interests.
Danielle Press pre-empted the review by blaming licensees. So what a surprise that she has jumped on one submission which supports this view. This is a stitch up and follows a long history of ASIC covering up their own failures by pointing the finger at advisers and licensees. Unless ASIC are forced to hand over the submissions to an independent panel, this review will not identify the root cause of the problems and will give ASIC another opportunity to make changes based on their own theoretical/ideological views, without any proper analysis of the impact on consumers and advisers.
“The SMSF Association has commented that the current advice process is too lengthy and prioritises the needs of the licensee over the consumer,”
Shouldn’t that read:
“The SMSF Association has commented that the current advice process is too lengthy and prioritises the needs of the licensee [b]who is responding to the demands of ASIC [/b]over the consumer,”
NO, because most licensees have requirements of their advisers which go MANY layers beyond what ASIC actually require. It may be for fear of ASIC, but the fact remains, ASIC requirements are far easier to adhere to than the onerous requirements of licensees who are doing this to protect against their bottom quartile advisers, who should be given the ass.
Seriously Tim. This is laughable. This profession is now at a point you have been wanting for many many years. The result is far few people receiving advice at a very (necessary) high cost. You simply cannot bring yourself to admit that there has been massive over reach in all areas of advice.
I see you still bemoan asset based fees. Cant wait for hourly fee rates where clients will pay even more !
Your last sentence is very instructive since you have been in the industry forever. I assume your licence has none of these ?
Bottom quartile in what sense? Revenue or compliance?
Explain look back, fee for no service…. how on earth can a bank will thousands of lawyers get it wrong costing the bank millions ASIC just decide to write the rules whenever they feel like it…
their is a big problem with ASIC they put rules out that are open for each license to work out the rules then asic decide they want a bonus this year and decide they are going to ligate this guys this year… no government employee should be getting performance bonuses when they ban them from the people they are earning their own
I would say there are three reasons for licensees setting the bar so high:
1. Fear of ASIC/AFCA/TPB
2. The compliance people making sure they are needed
3. The Licensees making sure they create the right environment so their own products are the only ones being recommended.
The solution is so simple – separate products from advice. Implementing it would be another things as it would result in staff at ASIC and at the major institutions being made redundant. The bureaucrats would never recommend government did this, regardless of how much better off the consumers would be.
Wow, that is so awaresome,…..does that mean the 9 separate legislators will all be amalgamated and we won’t have to worry about AML/CTF, privacy laws, AFCA, the Tax Practitioner Board, Australian Consumer laws, Licensee’s and PI insurance companies interpretation of Corp’s law and ASIC RG’s etc etc…. cause that would all lead to affordable advice. ….. or wait….ASIC’s idea of affordable advice….which is scaling advice that is already scaled to suit AwareSuper,…..cause that won’t do diddly squat for me… and it would more than likely lead to another disclaimer….or another form…