Speaking to InvestorDaily, NSW Nationals Senator John Williams – who was instrumental in forcing a Senate inquiry into ASIC’s handling of misconduct by Commonwealth FP advisers – said financial product advice is an area requiring greater scrutiny.
“Certainly, I’m concerned about vertical integration,” he said. “When a company has a financial product and planners [within the same company] are advising around those products, you have to ask the question as to whether it’s the best possible advice; I don’t believe [the Future of Financial Advice regime] addresses that.”
While the best interests duty requirement and conflicted remuneration ban should in theory do away with conflicts of interest, Senator Williams said that in practice conflicted product advice will be very difficult to police.
“I don’t yet know what the [Senate] inquiry will flush out and what the submissions will say or what witnesses we will call on, but I expect a lot of submissions and, no doubt, vertical integration is something I think the inquiry should look at closely,” the parliamentarian added.
Senator Williams, who is currently campaigning in the New England seat held by departing independent MP Tony Windsor, has drafted more than 100 questions to ASIC’s leadership regarding its handling of the Commonwealth FP matter, which are expected to be responded to today.
However, InvestorDaily understands an ASIC spokesperson contacted the senator’s office seeking an extension and will respond to the queries “as soon as possible”.
More broadly, Senator Williams said the integrity and honesty of financial advice offered to Australian consumers had never been more important.
“This is my big concern. We have about $1.5 trillion in super funds – it appears that more and more people are going to self-managed funds – so it is more and more important than ever that we have good, honest operators in financial planning because this is going to be a requirement of the public for decades to come,” he said.
“We need to ensure that ASIC is properly ensuring advisers are doing exactly what they’re meant to be doing in a timely fashion.”
