ASIC commissioner cites adviser conduct over Shield Master Trust
The Australian Securities and Investments Commission (ASIC) has pointed to possible misconduct on the part of financial advisers related to investments in the Shield Master Trust.
ASIC commissioner Alan Kirkland used his address to the Financial Advice Association of Australia (FAAA) Congress in Brisbane to cite the regulator’s investigation into the Shield Master Trust as “an example of where advice leads to poor, if not devastating, outcomes for consumers”.
“Our recent investigation into investments in the Shield Master Fund – which you may have seen reported in the media – is a prominent example.
“We understand that in a two-year period more than $480 million was invested in this fund by thousands of people.
“Potential investors were called by telemarketers and referred to financial advisers. They were advised to roll over from their existing superannuation funds and to put part or all of their superannuation into the Shield Master Fund. Many did so via superannuation products provided by Macquarie and Equity Trustees,” Kirkland said.
“While our work on this matter continues, and it involves a broad range of entities, it is important to note that some advisers appear to have played a crucial role in advising consumers to invest in Shield.”
“I wish that I could say that this is an isolated example. But it is sadly similar to a pattern of conduct we are seeing all too frequently – where telemarketers recruit people and hand them over to advisers.
“Those advisers then encourage people to move their super from what is sometimes a relatively well-performing fund into a platform product or self-managed super fund, with their precious retirement savings invested in high-risk property or crypto investment schemes that are highly unlikely to align with the best interests of the consumers involved,” the ASIC commissioner said.
If the proposed changes go through, we risk seeing lower-level advisers simply recommending clients move their money into the super fund they represent. This issue will only worsen exponentially. Instead of lowering education standards, the focus should be on enabling existing advisers to better assist their clients. Imagine if doctors or lawyers were required to deliver their advice in the same way financial advisers currently are—it would significantly hinder their ability to help the people who rely on them. The same principle applies to our profession.
Okay – so how many real advisers are part of this boiler room approach. Is it actual fully licenced CFP professionals, or those people who have just been authorised by a rogue element group who think that they can make a quick buck. It is about time that ASIC actually engage with us in the industry, rather than just make sweeping statements about this “is not an isolated example”. We ALL pay for this as these will again likely be CSLR claims in due course.
I myself have reported one of these supposed telemarketers flogging SMSF’s to ASIC months ago – no response from them
Don’t kid your self that CFP advisers are any better than anyone else
The over whelming majority of people who run Financial Planning Businesses are customer focussed highly ethical people. People who engage in these types of product floggings would be small minority of all advisers and sure they may be a CFP in there Curious Onlooker but it is not fair for you to put us all in the same boat
Real CFPs may not necessarily be “better”, depending on your definition. However they certainly are better educated. Real CFPs have to complete an exam and assignment at a higher level than anything taught in financial planning degrees.
Grandfathered CFPs on the other hand needed nothing more than a basic sub degree level diploma, and being around at a time when FPA was willing to debauch professional standards in order to generate a revenue stream.
How about some transparency here Alan? How many “advisers” were involved? You are making it sound like there is a systemic issue. If you are making that allegation, back it up. For the record, if I was approached by tele-marketers with that proposition, I would show them the door. As the regulator, deal with the bad advisers to maximum extent possible. Don’t besmirch the rest of us. ASIC makes it nauseatingly difficult to deliver advice effectively and professionally. You actively hinder the true professionals rather than working with us. If ASIC really wants to help consumers, play your part in implementing Recommendation 9 of the QAR now. I’m doing my part Alan. How about you do yours?