Speaking at the CFA Societies Australia Investment Conference in Sydney yesterday, Mr Shipton was questioned about advisers leaving the industry amid a continuing demand for financial advice.
In August, ASIC released a report on consumer attitudes on financial advice, noting in the report it would be conducting further research on unmet advice needs in 2020-21.
He was also asked about the issues around technological solutions having issues working around the distinction between personal advice and general advice.
“The first point is that we’re acutely aware of all of those issues. That’s the first point,” Mr Shipton said.
“Second point is that we’re doing a lot of work on general and personal advice.
“The average person does not understand, and I can understand this, the subtle but important difference between personal advice and general advice. And so that’s a starting point.”
Mr Shipton noted the shifts happening in the industry as advice businesses move from one path to another. He said ASIC is monitoring the situation.
“We want to engage with the industry about the consequences of this, unintended or otherwise, because we are worried about … unmet advice needs,” he said.
“We can’t dictate how a market develops but we certainly want to be a core part in the discussions to how it can best develop and how to optimise for the current environment that we’re in.”
Professional obligation lies with licensees, says ASIC
Mr Shipton said what ASIC wants to create is an environment where there is confidence and assurance that consumers are actually getting a fair deal and a fair outcome, and that people in financial services are living up to their professional expectations and obligations.
“That’s what we want. That’s a good result because that obligation ultimately sits on you. The way the financial regulatory system is designed in Australia – which is often misunderstood – is the first line of compliance is with the licensed entities themselves. That’s the first line,” Mr Shipton said.
“The obligation for fair, honest and efficient provision of financial services rests with financial licensees. You’re the first line both legally and professionally to make sure that standards are lifted and most importantly that we have fairness injected into every single part of that system.”
https://www.ifa.com.au/risk/27247-an-open-letter-to-asic-and-the-fsc
Maybe James Shipton could respond to the questions in the above article?
Ahhhh, this guys a comedian
How does this bloke find his way to work each morning?
The general consumer does not understand the difference between personal and general advice so ASIC make it impossible to provide personal advice to a “normal” person and then they will do a report on unmet needs — which will undoubtedly blame advisers for not giving advice at a loss.
It is simple — make the compliance framework client friendly and not ASIC friendly so that clients can be looked after.
ASIC’s Shipton is acutely aware and will conduct more research – is ASIC speak for MORE REGULATION, MORE BS RED TAPE, MORE NONCOMMERCIAL GOVT RULES – because we live in the Canberra bubble and have no concept of real world reality.
Let’s implement more and more and more REGS.
And then after it’s completely and utterly stuffed the Financial Advice Industry – they will assess the impacts.
It is so sad ASIC can make such BS rules with zero understanding of the situation, effects or research.
If a Financial Adviser acted in this way they would be locked up – yet ASIC can blindly do what ever the hell they want.
“engage with the industry about the consequences of this” – Just like they DIDNT do with LIF, FOFA, Grandfathered comms, and pretty much everything else. They are a Joke!
[b]I am openly stating that this pathetic Shipton media release is the advent of ASICk Joke attempting to place a cap or limit on how much we can charge per client to further affect profits and drive even more of us out.
[/b][b][/b]
Don’t fool yourselves that washed up Shipton or ASICk joke will be engaging in any meaningful dialogue with advisers or even AFSLs.
Their past actions show clearly what this is about.
1. They release a virtue signalling media release e.g. concern for consumers about insurance or bad advice or fee for no service etc
2. They either conduct a bogus ‘study’ and issue a flawed report with erroneous statistics stacked against us and our profession (or hijack an irrelevant international on topic study as long as those results also paint us as heinous criminals).
3. They raise ‘dire concerns’ via media channels regarding the results of the report, never admitting any of their own failings in the relevant area but always making out that somehow planners are all corrupt and been operating outside of the law – even if the law wasn’t previously around or it is a brand new interpretation of an existing law.
4. They go to their Labor mates to also beat the drum in parliament
5. They pass new utterly insane non-commercial regulations to ensure that the squeeze is applied even tighter for those of us who may be remaining or contemplating remaining
6. They then find yet another excuse or avenue to do exactly the same process
Legally they can’t tell us what we can charge, so under the bullshit they have orchestrated under FASEA, they don’t have to. They now will be pursuing us under ‘fairness’ code of conduct standards to close more of us down or force refunds over years of revenue to be paid back to clients. And don’t fool yourself that you’ll be immune if you do F4S only, or charge on an hourly basis. The verdict is guilty until you prove innocence but even then it is on every single client, every single year.
ASICk Joke is corrupt and have a political agenda that is completely opposed to our continued existence.
Now that these very learned people at ACIS have stuffed it all up and demonised the individual financial planner and not the “big boys,” now Shipton is worried unmet advice needs. What a genius – they never considered any unintended consequenses – just wanted to smash the industry. Next thing they will be telling us how much we will be able to charge our clients!
Hang all the University Graduates doing a Bachelor of Commerce or Business, Finance, Economics,, that would normally enter the advice world will replace exiting advisers and buy our businesses….won’t they? Oh wait they’ll have to do a Graduate Diploma of Financial Planning online before even getting a job, then find do PI year with their log book, because the FPA said the minimum should actually be [i]”only”[/i][i][/i] a Bachelor of Financial Planning for new and worth [i]20 points for existing[/i][i][/i] advisers. My point….accessibility of advice will be a long term issue due to the ability for the advice industry to attract new entrants as the education pool just drained out. I solely blame the FPA for that blunder influenced by the payments they received from a very select group of Uni’s.
Shipton wants to consider the implications now after the Royal Commission recommendations have been implemented ? It was a requirement of the Royal Commission to review these implications as part of the Royal Commission. What an unbelievable cock up !!!
[quote=Customer]Sound like James Shipton may be subliminally pushing for Robo Advice to be the next big thing.
Danielle Press and the guys at Six Park will be happy with that.[/quote][quote=Customer]
And this is just as a robo-advice business has been targeted by ASIC in relation to recommendations that were in conflict with the client goals.
Its all laughable! ASIC being the biggest joke of all!
Shipton clearly doesn’t get it. The poor exam turnout suggests at least 70% of financial advisers are about to walk out the door.
Sound like James Shipton may be subliminally pushing for Robo Advice to be the next big thing.
Danielle Press and the guys at Six Park will be happy with that.
These guys operate in a vaccum and have no true understanding of what they are playing around with. Blind Freddy can see that financial advice is quickly becoming a service that only wealthy Australian’s can afford.
Great!. So now when I get new clients and they cant afford the advice fees I’ll just refer them to ASIC and tell them they are looking into it.
other words for = lets give companies a green light for companies to charge to give robo advice a go so my people are locked into dud default super funds with no real advice. No we are not going to look to reduce costs to provide advice. What I do not get is if you are an advisers why you cannot simply give advice to anyone that has been given a licence. if there are companies out their with dud products why are they given a financial services licence in the first place
Dear Mr Shipton. Heres a thought. ASIC invented promoted LIF & FASEA-its got ASICs non-commercial signature all over it. You need to start NOW !!!!!! And really consult real small businessman advisers – NOT THE BANKS !
What ASIC have done to our industry reminds me of our cat…they stalk, torment and torture their prey until it’s dead then get really sad that it’s no longer alive to play their games with them anymore.