ASIC questioned on salaried planner consistency
The question of whether the Australian Securities and Investments Commission (ASIC) is being consistent in its handling of salaried planners employed by industry superannuation funds or their service providers has been raised by a number of financial planners.
In particular, the advisers pointed to the manner in which superannuation fund salaried advisers were being paid out of the fund’s administration fees or investment fees, meaning that all members of the fund were paying for advice whether they had received it or not.
The advisers raised the issue on the back of the latest announcement from ASIC concerning Commonwealth Financial Planning completing its enforceable undertaking relating to fee for no service.
In doing so, they pointed to the latest Financial Services Guides (FSGs) issued by two major industry funds – AustralianSuper and REST – which they said confirmed that financial advice salaries were being paid out of administration fees.
The advisers questioned whether the use of the administration fund to pay the salaried advisers meant that members were paying for advice but not receiving it.
The advisers described the ability of the industry funds to utilise their administration fees to pay salaried planners “discriminatory” and noted that ASIC had previously precluded the payment of external advisers under similar arrangements.
They said they believed the bottom line was that superannuation funds which owned salaried financial planning businesses were benefiting from not having to deal with client ‘opt-in’ or deal with fee disclosure statements because their operating expenses were covered out of the investment fees.austral
Recommended for you
A relevant provider has received a written direction from the Financial Services and Credit Panel after a superannuation rollover resulted in tax bill of over $200,000 for a client.
Estimates for the calendar year 2024 put the advice industry on track for a loss in adviser numbers as exits offset gains from new entrants.
Adviser Ratings shares five ways that financial advice changed in 2024 with an optimistic outlook for 2025, thanks to the Delivering Better Financial Outcomes legislation.
National advice firm Invest Blue has announced several acquisitions, including the purchase of an estate planning and wealth protection business Lambert Group.
