ASIC warned it will clamp down on financial advice misconduct and ensure it sees an end to grandfathered commissions.
The corporate watchdog outlined its priorities for the advice sector between now and 2023 in its recently released Corporate Plan.
One of its new priorities is to end grandfathered commissions with direction from Federal Treasurer Josh Frydenberg.
On a periodic basis, ASIC said it will undertake a quantitative review of firms that pay grandfathered commissions and test the extent they have changed such arrangements.
|Sponsored by OnePath Life|
Join us on the New Path
ASIC will then take a sample of payers and receivers of grandfathered commissions and conduct a qualitative review to find whether or not payers have ceased such arrangements. It will also examine how rebate arrangements work in practice.
Another initiative over the next five years is examining the effectiveness of measures aiming to improve the quality of advice. This will include scoping and commencing the work - which will involve a large number of advice file reviews, ASIC said.
Protecting consumers from the dangers of general advice is another priority. This will be done via consumer tests to find more appropriate labels or versions for general advice. ASIC will subsequently publish a report on the findings.
As for the gap in unmet advice needs, ASIC believes it has a role to play by examining the demand and supply of advice in this area.
Additionally, the regulator said it will support measures to improve the professionalism of financial advisers and target the potential misconduct and harms to consumers that may arise from the industry's shift towards general advice models.
"We are also closely monitoring the potential harms that may result from larger institutions' departure from the sector," ASIC said.
In terms of key projects in superannuation, ASIC wants to enhance its communication to superannuation trustees and their associated advisers by providing more accessible information about the work it conducts in the sector.
ASIC also flagged it will work diligently to help Frydenberg push through numerous legislative reforms stemming from the banking Royal Commission and Productivity Commission inquiry into superannuation.
This includes the proposed conduct accountability regime, single default account, advice fee deductions from superannuation accounts and anti-hawking prohibitions.