ASIC targets advisers on under-performing choice products
Financial advisers and their licensees are going to be held to account in instances where they have recommended under-performing choice superannuation products, according to the Australian Securities and Investments Commission (ASIC).
At the same time, ASIC has expressly mentioned the provision of financial advice around the establishment of self-managed superannuation funds (SMSFs) as a review area over the next 12 months.
The regulator’s attention to SMSF establishment advice compliance warranted its own headline in the ASIC Corporate plan covering the next four years with the promise that it would be a more than one year operation.
At the same time, ASIC said its focus on financial advisers would involve continuing to facilitate the registration of relevant providers and continuing to “engage with licensees and advisers to ensure they understand and comply with their new registration obligations.
It said it would also be completing a review of superannuation trustees’ distribution practices in relation to choice superannuation products “and the role of financial advisers and their licensees in the distribution of underperforming choice products.
Where life insurance is concerned, ASIC said it would be reviewing the direct sale of life insurance via a review focusing on low-value products where it would take action, including enforcement action, to address harmful practices.
The regulator said it would also continue to assess life insurers’ compliance with their obligations in relation to setting premiums with a focus on premium increase practices, disclosure and marketing and sustainable product design.
“We will take action against misconduct and we will communicate our findings to drive improved outcomes for consumers around product design,” it said.
Dealing with superannuation, ASIC said it would be reviewing industry practices and compliance with laws in relation to trustee administration and contact centres.
“We will take action, including enforcement action, against conduct that is misleading or otherwise results in unfair treatment of consumers,” it said.
“We will complete our review of superannuation trustees’ distribution practices in relation to choice superannuation products and the role of financial advisers and their licensees in the distribution of underperforming choice products.”