Connect Financial Service Brokers chief executive Paul Tynan believes if the Royal Commission has made anything clear, it's that ASIC is in the dark about how to police financial advice misconduct. Speaking to Financial Standard, Tynan said the key issue is that ASIC is part of a club which only hears its own noise. He said several of the country's largest financial institutions and consultants were also part of said club.
"The reality is the 90-day exception, buyer of last resort stuff - this has been going on for 30 years. ASIC knows this. It's not just AMP. It's what the entire industry was built on," he said.
Tynan also rubbished the idea of so-called 90-day exceptions only lasting for that period.
"If you look at a life [insurance] product in the '90s, it was brought out and sold, and the commission went to the adviser. That adviser could be dead, or the client might say they don't want that adviser, but that product could very well still be sitting on the system now. Do you really think they're turning the cap off after 90 days?"
He argued the system has become "so complicated it's not funny," adding: "We have people who don't understand what happens when you sit in front of a client and give advice. It's the captains of industry talking to the consultants, who talk to ASIC, who talk to the government, who prepare reports using those same consultants."
"No one should be shocked about vertical integration. They [institutions] wanted to control every step. They knew the advice to the consumer would blow up."
As a result of this, Tynan hasn't seen anything come out of the Royal Commission yet that genuinely surprised him.
"It was FoFA that brought in opting-in. But up until then, that's not how the industry operated. Those policies are still there, on the system. Do you really think the technology and processes have caught up?"This article was first published by https://www.financialstandard.com.au/Author: ALEX BURKE