Risk Regulatory Update
/FASEA failures granted an extension
Those candidates who failed the Financial Adviser Standards and Ethics Authority (FASEA) exam twice are now allowed to retake the exam in 2022. Senator Jane Hume has made the exemptions for those who have made two ‘genuine attempts’ at the exam and have failed due to the disruptions caused by the pandemic.
July exam registrations are now closed, but those who are eligible will have one more opportunity to pass the exam. In March 2021, just 69 per cent of those sitting the exam passed, which wasn’t that much better than the 67 per cent January pass rate.
New group definition required for CBA advice class action
Those customers who claimed that Commonwealth Bank advisers loaded them into costly CMLA life insurance policies instead of utilising cheaper alternatives have been asked to work to a new group definition.
Those that filed the class action claim that financial planners working for Commonwealth Financial Planning and Financial Wisdom encouraged clients to take out life insurance policies via former CBA subsidiary Commonwealth Mutual Life Assurance (CMLA), when cheaper policies existed. The class-action group is seeking losses they incurred as a result of the higher premiums going back to August 2014.
The two advice businesses are named as respondents in the class action, both of which are arguing that trustees should be the applicants, as they paid premiums out of superannuation trusts. They are also claiming the beneficiaries suffered no actionable loss.
June 18 saw a judge ordering the applicants to add a third applicant to the case, flesh out the applicants’ fiduciary claims, and change the group definition. The third applicant, the judge said, was to be someone who paid the extra premiums personally, rather than via their super fund.
Economics Committee to hear from Insurance Council
The House of Representatives Standing Committee on Economics is to hold a hearing via videoconference on June 25 as part of its ongoing Review of the Four Major Banks and other Financial Institutions. The hearing are to publicly scrutinise and hold Australia’s insurance sector to account.
Date: Friday, 25 June 2021
Time: 9.15am to 5.15pm
Location: Videoconference
The hearings will be webcast at aph.gov.au/live.
ASIC fighting NAB on fee-for-no-service breaches
The Australian Securities and Investments Commission (ASIC) is taking National Australia Bank (NAB) to task for allegations regarding breaches of fee-for-no-service. In Federal Court, ASIC’s representative accused NAB of ‘prolonged under-investment’ in systems, compliance and controls that enabled customers to be overcharged millions of dollars in fees without their knowledge. ASIC alleges that NAB knew exactly what was going on and it was not negligence or carelessness that resulted in these actions.
ASIC digs deeper to say that the conduct was ‘systemic, avoidable not merely mistaken and it persisted after May 2018’ after senior management and the bank were advised of the serious risks of non-compliance. NAB’s remediation programs were also criticised. The hearing continues.
