Product manufacturers should stay out of advice
Advisers should not be subject to direction from product manufacturers under the new design, distribution and product intervention powers, according to the Australian Securities and Investments Commission (ASIC).
ASIC senior executive leader, Strategy Group, Greg Kirk has told the Senate Economics Legislation committee that the regulator believes that product manufacturers should not be allowed to get in the way of the professional advice process.
Under questioning from Queensland Labor Senator, Chris Ketter Kirk said ASIC’s position was that the regime was designed to address situations, particularly the design and distribution obligation, where there was not personal advice.
“On the basis that whatever you did about design and distribution, if your customers are getting professional, good-quality advice, that is an intervening event, such that they should be entitled to rely on that advice and that those advisers should not be subject to direction from the product manufacturer about what advice they should be giving or who should be included,” he said.
“We would accept that there have been problems with the quality and professional standards in the advice area,” Kirk said. “We think the solution to that is to fix the quality of personal advice rather than substitute this obligation for it. “
“If you had both obligations, the personal advice obligations and the design and distribution obligations, applying to the same transaction I think there would be some tension between them.”
Recommended for you
As the year draws to a close, a new report has explored the key trends and areas of focus for financial advisers over the last 12 months.
Assured Support explores five tips to help financial advisers embed compliance into the heart of their business, with 2025 set to see further regulatory change.
David Sipina has been sentenced to three years under an intensive correction order for his role in the unlicensed Courtenay House financial services.
As AFSLs endeavour to meet their breach reporting obligations, a legal expert has emphasised why robust documentation will prove fruitful, particularly in the face of potential regulatory investigations.
