The Australian Securities and Investment’s Commission (ASIC) has released its much-anticipated proposed guidance on the conflicted remuneration ban.
Consultation Paper 189 Future of Financial Advice: Conflicted remuneration (CP 189) sets out proposals for guidance about complying with the conflicted remuneration provisions.
The ban on conflicted remuneration includes commissions and volume-based payments in relation to the distribution of and advice about retail investment products.
Such products include managed investments, superannuation, platforms and margin loans. There is also a ban on asset-based fees for borrowed amounts.
The ban on conflicted remuneration operates alongside other FoFA reforms including an obligation for advisers to act in the best interests of clients and a requirement for clients to opt-in to renew ongoing fee agreements.
“The ban on conflicted remuneration is a core element of the FoFA reforms so it’s important we get industry feedback on these proposals,” said ASIC Commissioner, Peter Kell.
‘The purpose of this guidance is to help industry understand the practical operation of these provisions and how ASIC will administer them.
“In particular, we will focus on the substance of the payment or benefit rather than what it is called – renaming a banned commission something else won’t change its substance.
“ASIC wants to work through the FoFA changes in a way that helps industry comply, so we encourage feedback on our proposed approach.”
To read the ASIC guidance, click here.
Submissions to CP 189 close on November 9 2012.
