Risk Regulatory Update
/AFA/FPA merger update
The Association of Financial Advisers (AFA) and the Financial Planning Association (FPA) merger is progressing, with a webinar for members set for 24 January (AFA) and 25 January (FPA). Voting commences in early February.
The merger is expected to be completed on 3 April 2023.
Olive Markets AFSL cancellation upheld by AAT
The Administrative Appeals Tribunal (AAT) has upheld the Australian Securities and Investments Commission (ASIC) decision to cancel the Australian financial services (AFS) licence of Olive Financial Markets. ASIC cancelled Olive’s licence in March 2020 after concerns were raised regarding possible breaches of legal obligations.
Olive’s former director, Scott Morrision, was also banned from providing financial services for seven years from 3 April 2020.
AIOFP recommendations for managing impact of LIF changes
Peter Johnston, the Association of Independently Owned Financial Professionals (AIOFP) executive director, has put forward a set of recommendations the organisation says will help repair issues caused by the Life Insurance Framework. The AIOFP wants a return to pre-Life Insurance Framework (LIF) regulations to support retail policy sales to consumers.
The proposals include:
Retain and increase commissions back to capped 80-100/15-20 per cent configuration.
Consumers are provided with a choice of a transparent commission or a fee-for-service payment option for financial advice.
Reduce compliance costs and duplication.
Restructure the financial adviser exam to focus on relevant risk advice capability.
Amnesty is provided for risk advisers who left the industry in the past three years to resit an exam to re-enter the industry immediately.
ASIC: advisers can provide home equity advice
ASIC has advised that the Centrelink Home Equity Access Scheme isn’t a credit product, which means advisers can include it in retirement plans and an Australian Credit Licence is not required.
Adviser exam fee increase
The new fee for the financial adviser exam is $1,500, which increased from $973. The initial cost of the exam was $540, when it was run by FASEA, with the jump to $973 after ASIC took responsibility for the exam.
BT class action settlement $29.5m
Legal firm Slater and Gordon have reached an agreement in the class action with Westpac and its subsidiaries, BT Funds Management Limited and Westpac Life Insurance Services Limited.
Slater and Gordon filed a class action in 2019 (Get Your Super Back campaign) alleging members in the BT Super for Life cash-only option had lower returns due to BT investing their funds via Westpac Life, with Westpac Life earning fees but not providing a valuable service.
The settlement was reached on a no admissions basis, with both BT and Westpac Life denying liability, at a cost of $29.5 million, subject to approval from the Federal Court.
