March 2024 adviser exam results
On 26 April 2024, ASIC released the results of the financial adviser exam held in March 2024.
This exam sitting was the first to reflect the amendments in the Corporations (Relevant Providers—Education and Training Standards) Amendment (2024 Measures No. 1) Determination 2024.
Of the 298 candidates who sat the exam, 70% passed. In releasing the results, ASIC has also stated that 21,102 candidates have sat the exam to date, and over 92% of those candidates have passed.
Super member service improvements - death benefit claims
On 1 May 2024, ASIC announced that it had commenced a review of industry practices and compliance with laws relating to superannuation member services, with an initial focus, which is part of a two-phase review, on how trustees handle death benefits claims.
Through the first phase of the review, ASIC focussed on public website communications and resources about death benefit nominations and how to make a death benefit claim. ASIC’s observations include:
- overall, complaints to AFCA about trustees’ delays in handling death benefits claims increased sevenfold between 2021 and 2023
- trustees should balance the need to have simple, efficient processes with the need to provide enough flexibility to pay death benefits to the right people
- strong website communications materials can serve as a foundation for more targeted communications
- trustees should regularly review complaints received about their claims handling processes and procedures to identify opportunities for uplift
The next phase of ASIC’s death benefits review will analyse relevant data and processes of a sample of trustees in detail.
The review is a dedicated multi-year project continuing over 2024 and beyond. ASIC will share further insights in a public report later this year.
Call on super trustees to improve gatekeeping of member savings
On 9 May 2024, ASIC called on superannuation trustees to renew efforts to protect members from unscrupulous operators amid evidence of inadequate oversight of advice fee deductions.
ASIC published REP 781 Review of superannuation trustee practices: Protecting members from harmful advice charges (REP 781), which outlines key findings from a review of the progress superannuation trustees have made in addressing deficiencies in their monitoring of fee deductions for the provision of financial advice. The review found these deficiencies continue to pose risks and cause detriment to members.
ASIC noted trustee vigilance can mitigate risks to members from unscrupulous operators, including cold calling businesses using high-pressure sales tactics that lead to inappropriate superannuation switching advice.
From a sample of 10 superannuation trustees representing approximately eight million members, managing a combined $923 billion in assets (as of 30 June 2023), ASIC found over a 12-month period:
- over $990 mllion in advice fees were charged across more than 476,000 member accounts
- three trustees reported not checking any advice documents on a risk or random basis
- fee caps as high as $20,000 or 5% of a member’s balance were in place, with few trustees implementing controls to protect members with low balances
- members of 70% of trustees were found with advice fee deductions exceeding $15,000
- variability in onboarding and monitoring processes for financial advisers, including limited checks of ASIC’s registers by some trustees
ASIC is urging superannuation trustees to reassess their oversight processes and consider taking steps to strengthen member protections, including:
- reviewing the ways financial advice documents are sampled to identify unscrupulous advisers providing harmful advice
- objectively considering the caps on advice fee deductions, including by using objective criteria to assess the cost of advice to help trustees determine appropriate fee caps
- enhancing adviser onboarding practices, including by vigilantly monitoring for financial advisers involved with cold calling businesses and using fact finds of advice licensees
- regularly checking ASIC’s Financial Adviser Register for unexpected adviser movements that might indicate a problem, maintaining watchlists and monitoring patterns or irregularities in advice fee deductions, withdrawals of member consent and rollovers into the fund
REP 781 forms part of ASIC’s broader work to minimise member harm caused by cold calling business models using high-pressure sales tactics and online click-bait advertisements to lure consumers into receiving inappropriate superannuation switching advice.
ASIC will publish an Information Sheet in the coming weeks, setting out how financial services laws apply to cold calling operators, financial advisers, and financial advice licensees.
