ASIC refuses tailored approach to remuneration disclosure

compliance/financial-planning/

29 May 2015
| By Mike |
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Amid all the discussion about transparency around planner remuneration, the Australian Securities and Investments Commission (ASIC) has refused to allow a planning firm to tailor the manner in which it reveals to clients the bonus opportunities available to its planners.

ASIC's refusal has been revealed in its latest "Overview of decisions on relief applications" with the regulator indicating that it was important for consumers to plainly understand how their advisers were remunerated.

It said the firm had requested a determination that describing the bonus opportunity offered to its authorised representatives as a dollar amount or as a percentage of a known amount (the adviser's salary) would impose an unreasonable burden on the firm and its authorised representatives to disclose confidential salary information.

Instead, the planning firm wanted to be allowed to disclose the advisers' potential bonuses as a description of the method of calculating the remuneration, including worked dollar examples.

We considered that it would not assist consumers to understand how their adviser is remunerated. ASIC said granting the determination would have allowed the firm to disclose the advisers' potential bonuses as a description of the method of calculating the remuneration, including worked dollar examples.

"We considered that it would not assist consumers to understand how their adviser is remunerated," the regulator said.

Discussing the reasons it had refused the application, ASIC said it believed the Parliament "intended the current requirement to be a high standard, prioritising the need for optimal disclosure from a consumer comprehension viewpoint over practicability for providing entities".

"…while we accept there is commercial benefit in keeping remuneration information confidential, we need to weigh that commercial benefit against the regulatory detriment of less than optimal disclosure," it said.

 

 

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