Speaking before the parliamentary joint committee on corporations and financial services today, Mr Kell said the Federal Court had imposed a civil penalty of $1 million on NSG only a “few hours” prior, marking the first time the court has issued a penalty for a breach of the best interests duty.
“[NSG’s] clients were commonly sold insurance and advised to roll over super accounts that committed them to costly, unsuitable and unnecessary financial arrangements,” Mr Kell said.
“The judge has remarked that he found the contraventions ‘very serious’.”
ASIC senior executive leader for financial services enforcement Tim Mullaly said the regulator expected NGS to be able to pay the fine.
“We’ve discussed with them the potential of paying that by term over a period of time to ensure that we are able to collect on that penalty … I don’t think there’s a written judgement as yet,” he said.
Mr Kell added “the judgement will be very interesting reading”.
Mr Kell said the judgement would make interesting reading. I will save my comment until after I have read it.
I am soooo in the sh#t now. I have been dragging my clients from their set and forget default super funds with VW combi fees to a V8 super car super fund with annual reviews and agreed value guaranteed renewable insurance cover that has been underwritten at time of application. I am soooo in the sh#t as the super fund is more expensive, has annual review fees, the insurance premiums are more because they now have adequate insurance cover now with Trauma cover, better TPD cover (any/own) and agreed value IP. What was i thinking??? I hope I can get a job at an Industry super fund were they do not deal with commission grabbing scum financial planners.
Can someone remind me why it was necessary for LIF given that Best interest was brought in as law under FOFA.
The first of thousands more to come. In case your stuck in the 90’s&00’s where you honestly think this “fee for service” nonsense that is commission by another name will stack up in court we’ll you better start praying you are not on the next law firms hit list of easy money. Can you hand on heart say every client warrants your monthly fee? Can you prove you are monitoring every portfolio? Even if you are, we all know it is mostly vanilla managed funds, etf’s and some very few direct equities. Nothing that warrants you pretending to “monitor” portfolios. You are selling a service and it needs to be paid per interview not a monthly fee. Get ready for court action.
Can you please explain your business model for all of us
If you are charging to monitoring a portfolio you’re in the wrong business, it’s not abou that
Before going in to melt down I would like to see exactly what the form the “breach” was in.
We need to get comment from AFA, FPA as well as from wise experts as the case doubtlessly has immense ramifications.
I doubt that any of us have ASIC on our Christmas list but it is always possible that NSG did something reprehensible.
If not, the case might be used to encourage new entrants into the industry.
Can ASIC confirm whether the fine will be passed back to the customers or are they just keeping it for higher salaries and bonuses?
Please ensure you get the facts on NSG before you hold them up as “doing the right thing” with insurances or that ASIC are simply filling their coffers. From what I saw of their practices (involving a client later referred to me), $1,000,000 may be well short of what they deserved
so moving a client from an under insured industry superfund to an appropriately insured retail superfund (more expensive) is a breach of the best interest duty, may has well leave the industry. What are the benefits of a financial planner anymore?
I think if you read it , moving to a more costly super fund from a cheaper fund with no added benefit ie better performance etc , would obviously a breach of doing the wrong thing by the client , rather than feathering the next of the adviser ??
yes and so i moving from a retail sf to a smsf and buying an investment property where the trustees have no financial acumen at all, (see this all the time)
YUP – that’s what this has always been about hasn’t it ASIC!?! Collecting on the “penalty” to fill your coffers! I wonder if any of that “penalty” money will be distributed back to the consumers who were “sold insurance and advised to roll over super accounts that committed them to costly, unsuitable and unnecessary financial arrangements”? I guess ASIC will let that one wash under the bridge and they continue collecting “penalties” from other financial services firms then!