FPA warns on product intervention consequences
The Financial Planning Association (FPA) has alerted the Australian Securities and Investment Commission (ASIC) to the possibility of its product intervention power leading to product manufacturers seeking to recoup potential losses from intervention via higher fees or reduced services.
In a submission filed in response to ASIC consultation around implementation of the product intervention power, the FPA said that while it supported the measure ASIC needed to consider the implications.
It said one of those implications was that product providers would seek to recoup potential losses from intervention and exampled them seeking to increase fees or reduce service levels.
“The problem will be exacerbated by the potential for the intervention power to affect the management of liquidity by product providers,” the FPA said. “The result is that consumers end up paying for the protection, which may not be the best use of their resources.”
However, the FPA said that it supported the proactive power for ASIC to intervene when a product resulted or was likely to result in significant detriment to consumers.
“We welcome the provision that a type of product intervention includes the mandate of seeking personal advice before being offered the product,” the FPA submission said.
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.