ASIC was questioned by Coalition senator and economic references committee member Amanda Stoker around the “huge uproar” created by Report 413, which led to the Trowbridge inquiry into life insurance advice and ultimately the current LIF commission settings.
“The 37 per cent failure rate for financial advice, assessed as part of the 2014 ASIC Report 413 review of life insurance advice resulted in a huge uproar and ultimately led to the Life Insurance Framework in 2017,” Senator Stoker said.
“ASIC’s media release 14-263MR included the statement ‘This is an unacceptable level of failure, and the life insurance industry is now on notice to lift standards and professionalism’.
“I have not been able to locate a similar statement to coincide with the release of ASIC report 639, on the quality of financial advice provided by superannuation funds, despite what appears to be a materially worse outcome.”
The regulator’s Report 639 into advice provided by super funds was similarly flagged by Coalition MP Bert van Manen at a recent parliamentary joint committee hearing, when Mr van Manen questioned why the report had not “led to major reforms of the super sector” when just 49 per cent of advice sampled in the report had been fully compliant with the best interests duty.
ASIC said it had “refined its process for reporting advice review compliance” since the release of Report 413 in 2014, when the FOFA laws had been in their infancy.
“We [now] identify all non-compliant advice but distinguish in our reporting about non-compliant advice between advice that indicates a risk of consumer harm (referred to as financial or non-financial detriment in Report 639) and advice that does not,” the regulator said.
“It is the former category of advice that causes us concern.”
ASIC said such a distinction was not made in Report 413, but that “given the law was new, in our review of post-FOFA advice for [Report] 413 where there was any doubt as to the final rating, we gave advisers the benefit of the doubt”.
The regulator said the report had comprised a mix of risk advice files from before and after the FOFA laws were implemented, with 33 per cent of post-FOFA advice files failing while 41 per cent of pre-FOFA files had failed.
In regards to Report 639, ASIC said while it found 36 per cent of super advice files did not demonstrate compliance with best interests duty and related obligations, “this was as a result of procedural, disclosure or record keeping deficiencies and did not indicate the member was at risk of suffering financial or non-financial detriment”.
The regulator concluded the report did not warrant further action as only 15 per cent of files had indicated the member was at risk of suffering a detriment.
“ASIC has not taken enforcement action against any specific funds or advice providers as a result of the advice review findings [in Report 639] and it does not plan to do so,” ASIC said.
All these comments are so spot on on
When are the FPA & AFA et al going to officially seek a legal opinion about bringing legal action against them on behalf of their members. Even if it is to just pay for a forum to have it put on public record that white collar crimes committed by large interest groups who ‘lobby’ political parties are ok, but if you’re the ‘little guy’ your stuffed.
So what does ASIC plan to do to remediate all those advisers (and their families) whose careers and lives have been unjustly and severely damaged. We are people too you know.
These corrupt reprehensible creatures should be subject to criminal charges when the totality of ramifications of their lies and crimes is taken into scope. Private citizens have and frequently do go to jail for [i]much [/i][i][/i]less. This is a travesty and every single ASIC staff member responsible for this ongoing situation needs charges levelled against them.[b] No faith in the integrity of applicable governance[/b][b][/b] can be ongoing until this happens.
Liars and corrupt. That’s all ASIC is.
They absolutely contrived and manufactured the data they provided in Report 413 and every person working at ASIC who had a hand in presenting the report to the Government (and the media most importantly – because that’s the tool ASIC really used) should hang their F&#$ing heads in shame.
You call yourself regulators. Pfffft….! You’re an absolute disgrace.
Left wing political agendas dominate the public sector – difficult for private sector businesses to get a fair hearing
They have destroyed an industry and the lives and businesses of thousands of advisers by their lies
It has been obvious for a very long time that there needs to be a root and branch investigation into the secret workings of ASIC.
Agreed, ASIC is corrupt
Contrived outcome. Complete lies. This one thing alone should lead to ASIC’s complete overhaul as everyone knew they were lying and corrupt back then!!!! Why has all of this been allowed to continue and destroy a very important part of the economy, community, and public financial support services??
100% ASIC sooooo Corrupt med by their Regulatory Capture of hating all things Real Advisers and Supporting All things Industry Super.
Disgusting and need a complete clean out
Con Job
Does smoke and mirrors mean anything?
Stitch up