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Insto dealers charging fees without advice

An ASIC investigation has confirmed the six largest vertically-integrated advice providers are guilty of charging fees to clients without providing advice.

The corporate regulator issued an update today on its ‘wealth management project’ – a probe into the six largest financial planning companies, which was formed off the back of media and parliamentary scrutiny of conflicts of interest within vertical integration.

According to a statement from ASIC deputy chair Peter Kell, released this morning, the investigation has turned up “multiple instances of licensees charging clients for financial advice, including annual advice reviews, where the advice was not provided”.

“Most of the fees have been charged as part of a client's service agreement with their financial adviser,” the statement revealed.

Mr Kell said the investigation is ongoing and that further action against offending licensees may be taken.

“ASIC will consider all regulatory options, including enforcement action, where we find evidence of breaches of the law relating to fees being charged where no advice service has been provided,” Mr Kell said.

“We will look to ensure that advice licensees follow a proper process of customer remediation and reimbursement of fees where such breaches have occurred.”


In January, the corporate regulator revealed it has tasked two regulatory teams with investigating the six largest financial advice providers, on the lookout for miselling and advice failures.

In its submission to the Senate’s ‘scrutiny of financial advice’ inquiry, the regulator said the surveillance project would be underway until June, on the lookout for mis-selling and advice failures.

“The inherent conflict of interest created by vertical integration may not be readily apparent to clients, particularly if the product manufacturer and advice parts of the business operate under separate licences and business names,” the submission said.