What was ASIC’s focus on fee-for-no-service all for?
The news that no criminal charges would be brought against AMP Financial Planning over alleged fee-for-no-service raises questions about the level of focus directed on the entire fee-for-no-service by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
This is an important question because, during the Royal Commission, the Australian Securities and Investments Commission (ASIC) provided most of the detail on AMP’s alleged fee-for-no-service conduct to the counsels assisting the Royal Commissioner, Kenneth Hayne.
But seems those allegations will never be tested in a Court of Law. The Commonwealth Director of Public Prosecutions (CDPP) quite simply found there was not enough evidence there to proceed.
The question this raises is whether there was any point to the degree of concentration on fee-for-no-service during the Royal Commission if lawyers later believed there was insufficient evidence to take the matter to court.
It was ASIC’s decision, in consultation with the CDPP, that decided to close the investigation as the CDPP determined that given the available evidence along with weighing relevant public interest factors, that no criminal charges should be brought of that conduct.
Following the Royal Commission financial advisers have been pointed to as a ‘troublesome’ industry, have been piled on with an onerous amount of compliance including disclosing the same fees eight times over to clients, leading to many small practices and advisers being knocked out of the industry.
All of this has reduced and will continue to reduce the industry to a handful of advisers unable to service the unmet advice gap all while the one of the companies most focused upon at the Royal Commission over fee-for-no-service, AMP, has walked away scot-free except for a large measure of damage to its reputation.
But the issue is not over yet for AMP.
All eyes will be on the regulator and AMP as ASIC said it still had civil proceedings on foot in the Federal Court on allegations of fee-for-no-service including the fees charged to deceased customers.
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