ASIC finds asset consultant fee structures conflicted

fund-managers/ASIC/superannuation-trustees/australian-securities-and-investments-commission/

10 August 2012
| By Staff |
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The financial services regulator has identified conflicts of interest present in asset consultant business models, which it said needed to be managed properly.

The Australian Securities and Investments Commission (ASIC) Commissioner Greg Tanzer said conflicts included fee structures based on preferring services, in-house funds and other products of related parties of the asset consultant. 

In some circumstances, asset consultants had to recommend products to multiple clients where capacity to participate in these products might be limited, Tanzer said.

"Asset consultants provide advice to both superannuation trustees and responsible entities and are integral to the investment decisions made by these entities," he said, adding that the overall findings were generally positive.

"The asset consultants we spoke to demonstrated an awareness of, and compliance commitment to, their contractual and licensee obligations," Tanzer said.

ASIC also found a growing trend towards in-house for some or all investment management functions, with the sector also seeing a decrease in clients due to merger and consolidation activity.

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