ASIC Conflicts Giving Advice

On Jan. 23, ASIC issued report on conflicts in advice by larger firm's.

  • Reported on how large financial institutions manage conflicts of interest in advice.


  • Reviewed advice provided by five biggest vertically integrated financial institutions.
  • Identified areas where improvement needed in management of conflicts of interest.
  • In most cases, weightings in products recommended towards those made in-house.
  • Conflict is inherent, need to properly manage advisory arms, ensure quality advice.

Future Proposals

  • ASIC to consult on proposal for transparent public reporting for advice of licensees.
  • Examined sample of files to test if advice satisfied the 'best interests' requirements.
  • 75% reviewed did not show compliance with duty to act in best interest of of client.
  • 10% of advice, was likely to leave customer in significantly worse financial position.
  • Improve advisor monitoring, recruiting, ban advisor with serious compliance failing.
  • Findings should be examined by all vertically integrated firms in the financial sector.