ASIC campaign makes waves
|
|
The Australian Securities and Investments Commission’s (ASIC’s) proposed investor education campaign, ‘Swimming between the Flags’, is set to receive a mixed reception from planners.
The campaign, tentatively scheduled for launch later this year, classifies some financial products as ‘within the flags’, and therefore safer for consumers.
Bank deposits, superannuation, blue chip shares, ‘vanilla’ managed funds and products with low risks or independent professional advice are deemed ‘within the flags’.
Financial Planning Association (FPA) chief executive Jo-Anne Bloch said the campaign had “some merit” because ASIC has placed financial advice between the flags.
“By doing so the regulator is effectively acknowledging the role of planners and acknowledging it as a valuable activity, which is to be welcomed.”
Bloch said the “only real concern” the FPA would have with the campaign is with the criteria ASIC uses to decide which products are between the flags and which are not.
Capricorn Investment Partners director Ray Griffin described the campaign as “counter productive to the ongoing efforts of planners to educate clients on the long-term benefits of growth assets, despite the carnage of the last two years”.
Flagging designated investment products and sectors in a public campaign would “not necessarily quarantine consumers from losses”, he said.
“I can easily mount a counter argument that being invested all your life in bank term deposits — which get a between the flags rating from ASIC — can be extraordinarily risky.”
Shadforth Financial Group principal, private client adviser, David Haintz said the campaign was “correct in principle” but felt that “consumers who take advice should have no need for it”.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
