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FSC questions ASIC methodology
The Financial Services Council (FSC) has acknowledged that the Australian Securities and Investments Commission’s (ASIC’s) recent review of vertically integrated institutions and conflicts of interest shows that community and regulator concerns about the quality of financial advice in Australia remain valid.
ASIC’s review of 200 files showed that 130 did not meet the regulator’s record-keeping standards, with 19 being concerning enough to warrant ASIC working with the individual licensees to compensate clients.
The FSC questioned ASIC’s methodology in completing the reviews. ASIC considered file documentation alone in making their findings, while the FSC said that the client and adviser should be consulted before drawing definitive conclusions on the appropriateness of advice.
While there have already been reform to the industry to try and improve the quality of advice, such as the Future of Financial Advice reforms, the Council acknowledged that the review proved that more work needed to be done.
The FSC said that it looked forward to working with ASIC on its proposal to introduce more transparent public reporting on approved product lists.
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Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
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