Report 377 Review of advice on retail structured products found that 50 per cent of the files reviewed by ASIC contained “insufficient evidence to show that advisers had met their obligations to investigate clients’ relevant circumstances, the subject matter of the advice and then to provide appropriate recommendations.”
An ASIC report in May 2013 also found issues with the way complex capital products are marketed to consumers.
As part of Report 377 five pieces of advice from 10 firms were reviewed.
“The findings were disappointing and with FOFA now raising the bar for advisers, our warning against inappropriate selling of complex products cannot be clearer,” said ASIC commissioner Peter Kell.
“Capital protected products are complex and can be difficult for investors to understand. Advice about them needs to be appropriate and accurate. Where it isn’t, we will take action,” he said.
“Where our review identified concerns with the advice provided, we are analysing the cause of the problem and considering appropriate regulatory outcomes. In some cases, we are conducting further surveillance with a view to enforcement action where merited,” said Mr Kell.
“We will also ensure that where we have significant concerns with the advice provided to individual clients, those clients have their position appropriately reviewed,” he said.
It would appear from the comments above the ASIC have not been looking into many company’s, if they had taken the advise they had been given In April 2012 that LM MPF was in trouble they could of taken action then, but they never did a thing to protect overseas investors 450 million $ was invested by so many people, leaving them without any protection what so ever, destroying hundred of people’s life’s around the world after they had worked hard towards their retirement, I’m sure not many F.A will recommend Australia as a safe haven to put your money into. One question I would still like to know is WHY did they do nothing, or is this once again another question or issue that cannot be answered.
Perhaps ASIC should ban the use of the term capital protection full stop. The only capital being protected was that of the issuer. Then there was/is the mushy marketing and paid for fund research ratings. Mostly all hindsight now …wouldn’t be many of these products getting issued lately anyway I hope?
Capital protected products often seem to be recommended to older investors seeking comfort and returns. While explaining the products themselves is clearly an issue for ASIC, their suitability should also reflect each persons expected longevity, their attitude to time and their approach to managing it effectively. Advisers who are properly trained in longevity awareness can expect to be a much better situation to interpret these products for their clients.
ASIC keeping the B’s honest…that’s what we like to see.
A little behind the game you would think. These products been around since pre-GFC. Another example of a regulator not protecting consumers in a timely manner. Another YouTube video on the way??