The flurry of regulatory changes that have been announced or are currently in progress doesn’t show any signs of abating, and the corporate regulator recognises that there are risks involved with advisers trying to stay on top of the shifting landscape.
Speaking at the SMSF Association National Conference in Brisbane on Wednesday, Leah Sciacca, senior executive leader – financial services and wealth group at the Australian Securities and Investments Commission (ASIC), noted the scale of changes happening within financial services.
“I think specifically for the advice industry, it’s not an external risk as much as there is a lot of change in the advice industry for financial advisers,” Ms Sciacca said.
“Professional standards, the adviser registration became a requirement just last week, and more are coming down the pipeline in terms of the government’s response to the Quality of Advice Review.”
She stressed, however, that while it is easy to focus on these external factors, advisers shouldn’t lose sight of their current obligations.
“Change is inevitable, but I think as well just focusing on existing obligations – your clients, record keeping, all of those basics – I think it’s a timely reminder that a lot happens perhaps externally, and just not losing sight of all those current obligations,” Ms Sciacca said.
Ms Sciacca also acknowledged that the corporate regulator would continue to focus on retirement outcomes as part of its four-year corporate priority plan, specifically on protecting consumers as they plan their retirement.
To achieve its priorities, she said ASIC will undertake a range of strategic and enforcement work, included in which is a review of SMSF advice.
“As we know, setting up an SMSF is a significant step and may have serious consequences for consumers, particularly their retirement savings and also insurance cover,” Ms Sciacca said.
“We think SMSFs are suitable for some but not all consumers, and financial advisers must use their professional judgement to consider the broad range of relevant factors to ensure SMSFs are established only when it is suitable for the unique objectives and circumstances of the individual.”
She explained that ASIC has previously undertaken SMSF advice thematic surveillance and it remains an area of interest, as does observing incidences of inappropriate SMSF advice in past reviews.
The corporate regulator announced earlier this week that financial advisers are also among a group of stakeholders it’s paying close attention to following a review into the role super trustees, advisers and their licensees play in influencing the investment options in member super portfolios.
ASIC said on Wednesday that the results of the review were concerning. Namely, it found that advisers were not always addressing underperformance where relevant.
Having reviewed 88 advice files across 26 advice licensees, focusing on advice provided about nine options that all persistently failed to meet performance expectations, the regulator said it is considering a “range of regulatory responses” where the results of the review were concerning.
Commenting on the findings, ASIC commissioner Simone Constant said: “Australians trust their super funds and financial advisers to ensure they’re getting the best possible returns on their super savings. We expect funds and advisers to ensure that trust is not misplaced,” Ms Constant said.
“Members should be informed about their super investments – not left in the dark if their super investments are not performing as expected, and there may be better alternatives.”
and just what are your guidelines / framework ASIC for the performance review??? Oh that’s right, make them up retrospectively on the run to suit yourselves, and smash every adviser later…
Thanks for nothing QAR and Jones, ASIC’s relentless pursuit of advisers for compliance and Levy $ rolls on, meanwhile MP Jones continues to open the door to ISF’s that will bypass ASIC’s regulatory hurdles and costs. It explains everything that is wrong with Canberra.
“We think SMSFs are suitable for some but not all consumers, and financial advisers must use their professional judgement to consider the broad range of relevant factors to ensure SMSFs are established only when it is suitable for the unique objectives and circumstances of the individual.”
Honestly, has ASIC ever looked at who sets up the SMSFs? I would say the vast majority come from online set ups directly from the members who have little clue what they are doing, and then via unlicensed advice from accountants. Why are they only looking at advisers? I see a lot of advisers actually closing SMSF’s because they are not suitable.
How much oversight does ASIC apply to all the SOA’s currently being product Industry Super?
Not long before no advisers left. Net losses 2024 even before CSoLR. ASIC main culprit along with thieving goverment. Then the gaul for a “review” into why advice costs more. Because you all ruined it and pushed everyone out. Inane.
Wouldn’t it be great if ASIC didnt exist and the profession was self-regulated without direct goverment regulation and taxes? Like every other developed country in the world where they are trying to encourage advice.
You can only shake your head in disgust really.
Should I crystalize unrealized losses in a bid to chase returns ?
Should I have a crystal ball ?
Is past performance a guarantee of future performance ?
What period of time is reasonable to judge an equity fund (by way of example).
What if personal risk protection is attached ?
I cannot see any rational basis for an adviser to be penalized for “under performance” of assets.
It will always be too subjective an issue.
How about some Regulatory Relief hey ASIC.
Canberra talk about Reducing Red Tape and Affordable Advice.
YET ALL WE HEAR FROM ASIC ARE MORE REGS, MORE RED TAPE AND MORE USELESS COSTS.
The Gordian Knot
The Hot Mess
ITS STILL A COMPLETE NIGHTMARE ASIC
ASIC telling anyone how to do anything is a joke. They have to be one of the poorest performing Government Departments. Think back to the revelations of the Royal Commission. All that happened on their watch while they had and still have cosy relationships with the big end of town and accepted backhanders from them.
They keep piling on extra, unpaid, work on our profession with absolutely no thought to us at all.
They should look out the window sometimes. It is the real world out there. Someone needs to explain the facts of life to them, not that they would listen. They know best (sic)
Anyone out there who thinks ASIC does an acceptable job. Not asking for good, just acceptable. I personally have never spoken to anyone with a good word to say about ASIC. If it was not so serious, I would laugh
I cancelled my license because the anguish and uncertainty were simply unhealthy. It is a wonder there is not a class action against the government for the total ineptitude shown the past decade with this whole licensing debacle.
So now Simone Constant from ASIC is stating that if Financial Advisers are found to have recommended a super fund and investment strategy that is suitable and acceptable by their client and reflects their risk appetite and financial objectives….in the event that particular fund or investment options are not deemed to have produced the absolute highest investment returns compared to another fund the Financial Adviser could be considered negligent and open to attack ????????
You cannot be serious.
How often would you like Financial Advisers to be ” fund shopping” their clients business and switching funds and selling down investment options and chasing the best performing fund over the last 1,2 or 5 year period ??
What about super funds with insurance attached where the client cannot obtain alternative insurance cover due to health restrictions??……..have you thought about the reality Simone Constant or just going for a good media grab to make ASIC look like the gatekeeper for Australians when you have no idea about the Adviser/ client relationship and reality.
I suspect ASIC will never stop – until it is in an Industry Fund – seems to be a very lite touch if any regulation there?
We have always been blames for product failures and will continue to be, look at the CSoLR – we fund poor products unlicensed advisers and asic to litigate and keep proceeds. ASIC are just another pig in the trough and every other nation in the world do NOT treat their advisers like this. ASIC and the requisite regulation of Advisers is disgusting. And shameless about it.
ASIC will never stop or back off the slightest. Why? Because everybody in Canberra that can, will. Not because it’s right, but because they can. There needs to be an RC into ASIC and Treasury. A truly shocking level of bullying that shows no sign of abating. Next, they will be going after Insurance Advice – it will never stop until every adviser is buried, and all that will be left will be Canberra Insto RC cronies.
Roflmao. That is the new headline for ASIC’s letter when asking an Adviser to please forward a bunch of files!
Hilarious!! Yes ASIC we already know that nothing is going to change really and you will keep doing nothing to fix the problem…..
Oh, except charge us for doing your job in trying to stop unlicensed fraudsters like Caddick