The Australian Securities and Investments Commission (ASIC) has confirmed it will undertake another shadow-shopping exercise to ensure financial planners are not misselling in the new choice of fund environment.
ASIC ACT regional commissioner and deputy executive director of consumer protection Delia Rickard said the shadow-shopping task had been outsourced to a private consultancy.
Rickard said ASIC intended to repeat the exercises every couple of years.
“Everyone is concerned about misselling in the new choice environment and we have a number of strategies in place to deal with that issue,” she said.
Rickard said shadow-shopping was just one approach and that the regulator would also be examining around 300 statements of advice, as well as closely monitoring advertising for any “misleading or deceptive claims” on fees and costs.
She said that it was expected to be at least two months before ASIC announced anything publicly, but that it would move earlier if any strong trends were seen to emerge.
ASIC assistant director of superannuation and life insurance Louie du Pre said that one of the biggest issues for the regulator in dealing with financial advisers was that the advice they provided was accurate with respect to a client’s existing fund and any fund they were recommending.
“Financial advisers may only want to talk about the fund they are recommending but the law dictates that they make reasonable efforts to understand the benefits of their client’s existing fund,” she said.
