The corporate regulator has cautioned against in-house product recommendation practices by advisers in its strategic outlook for 2014/2015.
In a document published yesterday, ASIC noted the continuing consolidation in the funds management space.
“The four major banks [are] estimated to account for around 60 per cent of total industry revenue in 2013–14,” ASIC said.
Additional consolidation is expected to take place over the five years to 2018/2019, said the regulator, with banks “likely to continue to increase their interests in smaller fund managers”.
“Consolidation is also more likely to occur as superannuation funds grow in size and start to bring fund management capabilities in-house,” said ASIC.
Vertical integration in banking along the product distribution chain “continues to pose challenges”, warned the regulator.
“Advisers may persuade investors and financial consumers to invest in in-house products when that may not be in their best interests,” ASIC said.
“Platform operators that are also advisory dealer groups are in a position to direct many clients to in-house products."
ASIC also warned it would be concentrating on financial advisers throughout 2014/2015, as well as responsible entities operating managed investment schemes.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 10:02Former Dover and Synchron adviser banned for five yearsBy Eliot Hastie
- 09:37Very few Australians save and even fewer invest their moneyBy Reporter
- 09:49Advisers undercharging clients for efforts, says CEOBy Adrian Flores
- 23 Jan 2019Adelaide adviser permanently banned from industryBy Eliot Hastie
- 23 Jan 2019Bowen slams ‘woeful’ handling of royal commissionBy James Mitchell
- 23 Jan 2019Gender super gap lower but still at 34%By Adrian Flores
- view all