ASIC convened multiple sitting panels of the Financial Services and Credit Panel (FSCP) between July and October 2024 targeting poor superannuation advice involving contributions or superannuation rollover. By following the advice, clients exceeded the superannuation contribution caps or untaxed plan cap resulting in clients paying more tax.
ASIC acted after it identified multiple instances or a theme from breach reports submitted by Australian Financial Services (AFS) licensees of such misconduct by financial advisers.
Multiple sitting panels of the FSCP were convened by ASIC because it was concerned the financial advisers had failed to comply with the best interest duty and give appropriate advice to their clients. ASIC was also concerned the advisers had breached the Financial Planners and Advisers Code of Ethics.
The panels have so far given:
- two financial advisers reprimands
- one financial adviser a written direction to appoint an independent person to audit the next 10 pieces of advice intended for retail clients, and submit a report to ASIC on the adviser's compliance, and
- one financial adviser a direction to undertake continuing professional education in the next 12 months (in addition to their ordinary education and training requirements).
ASIC publishes the FSCP's decisions on the FSCP Outcomes Register.
ASIC continues to refer financial advisers to the FSCP to address and highlight the misconduct, its impact on consumers and the importance of financial advisers complying with their advice and conduct obligations whilst always acting in a manner that promotes the value of diligence.
Unsuitable superannuation advice resulting in adverse consumer outcomes remains a key issue for 2025. Advisers must identify their clients' personal circumstances in relation to superannuation caps, so that advice provided is in their clients' best interests. Where we identify thematic misconduct involving financial advisers, we will consider taking regulatory action including referring financial advisers to the FSCP.
The relevant AFS licensees had compensated the affected clients for any financial and non-financial loss suffered.
Important reminders:
- Financial advisers must identify their clients' personal circumstances in relation to superannuation caps, so that the advice provided is in their clients' best interests.
- AFS licensees should take steps to ensure their representatives are adequately trained around giving superannuation advice involving contributions and superannuation rollover and remind advisers to remain diligent with their advice processes to act in the client's best interests.
- AFS licensees must have arrangements for monitoring and supervising representatives and for remediating clients if non-compliant superannuation advice is identified.
Background
The FSCP makes administrative decisions on matters referred to it by ASIC that relate to the conduct of financial advisers. The FSCP is a pool of industry participants, appointed by the Minister, that ASIC draws upon when forming individual sitting panels. Each sitting panel comprises an ASIC staff member and at least two members of the FSCP. The FSCP has a range of powers to enable it to consider and respond to a range of financial adviser misconduct.
Contribution caps are the limits on how much a person can pay into their super fund each financial year without having to pay extra tax. The cap amount and the extra tax a person must pay depends on whether the contributions are concessional (before tax) or (non-concessional (after tax) see: Understanding concessional and non-concessional contributions.
Untaxed plan cap amount is the maximum amount of the untaxed elements taxed at concessional rates. Amounts above the untaxed plan cap are taxed at the top marginal rate see: Tax on super benefits.
For further information on the FSCP see:
- Regulatory Guide 263 Financial Services and Credit Panel for the principles and processes relating to the FSCP.
