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New ASIC guidance shackles planners

The approach to conflicted remuneration outlined in the Australian Securities and Investments Commission’s RG246 guidance virtually bans anyone from pursuing a career that involves selling an employer’s financial products, says Tria Investment Partners.

Although the guide has some “laudable ambitions” some measures appear excessive, in particular the restrictions on how employees sell their employer’s financial products to retail investors, Tria managing director Andrew Baker wrote in the latest Trialogue update.

Employees can receive a salary, but can’t receive a bonus based primarily on sales success.

“How you are supposed to pursue a career in selling financial products - should that be your ambition - is unclear,” Baker said.

“Indeed, this career path appears to be effectively banned. 'Go and sell real estate instead' [which is not covered under RG246] seems to be the implicit message,” he said.

Elsewhere in the guide, Baker said the ban on volume-based shelf-space paid by fund managers to platform operators appears to have “tightened considerably” and is likely to drive vertical integration in the platform space.

Baker said the measures are “exceptional in a world where real estate and stockbroker commissions survive, and where payments from consumer goods manufacturers to supermarkets for physical shelf-space remain commonplace.”

The new guidance represents “another turn of the screw on the platform business model”, he added.


“As with much investor protection regulation we have seen in recent years, one of the side effects has been the creation of ever larger vertically-integrated competitors and reduced investor choice. RG246 looks little different,” he said.