23rd Feb 2015
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Calls to restore ASIC funding
Calls to restore ASIC funding

CHOICE has put its weight behind the growing calls for the government to provide more resources, rather than cuts to funding for the Australian Securities and Investment Commission (ASIC).

"Australia’s financial planning industry reads like a scandal rap sheet – CBA, Storm Financial, Great Southern, Westpoint, Fincorp, Trio, TimberCorp - which makes it even more alarming that less than two per cent of financial advice licensees will be subject to proactive surveillance by ASIC,” says CHOICE Chief Executive Alan Kirkland.

While ASIC has made it clear that it considers investigating rogue financial planners and practices a priority, the regulator concedes that staff cuts make this increasingly difficult. Planned government funding reduction will see ASIC staff numbers fall by 209 this financial year. On top of the $47 million ‘efficiency dividend’ imposed over the next four financial years (including the current one), ASIC will see a funding reduction of $120 million over the same period.

"By ASIC’s own admission [they’ll] only have resources to undertake active surveillance on each of the remaining 164 businesses with banking licenses in Australia once every 13 years,” says Mr Kirkland.

To date over 100,000 consumers have lost $5.7 billion to financial collapses in Australia.

The call by CHOICE to stop funding cuts forms part of its pre-budget submission to the government and comes just days before financial planning irregularities at NAB were revealed. Fairfax Media reported over the weekend that the bank had settled somewhere in the region of $10 million to $15 million with 750 customers who received inappropriate advice.

Several senators have called for a full royal commission into the entire financial planning industry. Calls for a royal commission following financial planning scandals at the Commonwealth Bank and Macquarie Private Wealth were rejected by the government, however, a group of crossbench senators consider the discovery of irregularities at NAB strengthen the argument for such an investigation. Nationals Senator John Williams said he hoped it would make some of his colleagues who had voted against a royal commission reconsider their position. "The few colleagues I've talked to are very supportive and the I'm confident the push for a royal commission will build, and build strongly," he said.

Independent Senator Nick Xenophon said he was concerned that because the NAB was compensating customers in secret it would mean that other consumers may not be aware of the need to revisit the advice they were given to determine if it was appropriate. "These financial victims are being re-victimised again by NAB undertaking these negotiations in secret," Senator Xenophon said.

Read more at CHOICE.com.au

Read more at SMH.com.au

Opinion: Unfair shift of responsibility

Despite the push to shift the responsibility for retirement funding onto the individual, the government is gradually removing every safeguard available to the consumer.

The so-called burden of an ageing population is not one that the government plans to bear, of that we are clear. Although the legislation is stalled in the Senate, there are definite plans afoot to reduce Age Pension funding costs. And let us not be deaf to the rumblings that asset-rich baby boomers may see themselves with no government-funded benefits whatsoever. And while it’s easy to argue that this is indeed necessary to keep the country’s coffers healthy, the systematic reduction of consumer safeguards and the avenues for independent advice are counterproductive.

Cutting funding to the financial services regulator ASIC is foolhardy at best, but it is also likely to be increasingly damaging not only to consumers, but to an industry which is seen as one of the very few with the ability to flourish under current conditions. For every trustworthy planner correctly plying their trade, we’re led to believe are several more just waiting to fleece you of your hard-earned cash. Until a full-blown royal commission is held, why should we believe otherwise? It certainly pays to be cautious.

In a little-publicised move, the National Information Centre on Retirement Investments (NICRI) will cease to exist this week. For the last 25 years NICRI has provided information free of charge to retirees and pre-retirees on investment matters such as aged care funding, Centrelink benefits, financial planning strategies, financial counselling and more. Following the removal of government funding, the organisation will no longer be providing this valuable service.

Balancing the budget of the nation is obviously important, but when it puts at risk the financial future of every individual who needs qualified, independent financial advice to ensure they can fund even a modest retirement, a little more thought and planning by the government is clearly required.

Were you aware that NICRI is closing due to the removal of government funding? Do you think there should be a royal commission into the financial planning industry? Are you reluctant to see a financial planner due to the failings of the industry in general?





    COMMENTS

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    fearlessfly
    23rd Feb 2015
    10:18am
    From what I've read about ASIC over the past several months, the whole damned organisation needs to be cleaned out (FIRED!!) from lower management right up to the half wit at the top of the tree, and replaced with people with GUTS to go after and hammer these damned scurrilous Australian & Overseas Corporations !!
    Tom Tank
    23rd Feb 2015
    11:30am
    It is not so much a case to firing ASIC as provide them with the resources they need to do their job properly.
    The Tax Office are dramatically cutting staff due to their budget being reduced so they will be less effective.
    We have a government who seem to be incapable of looking at the BIG picture that a budget has two sides INCOME as well as expenditure. They are giving money away to big business but screwing you and me.
    MITZY
    23rd Feb 2015
    11:33am
    Oh so true, Tom Tank.
    fearlessfly
    23rd Feb 2015
    11:58am
    SOMEBODY in the management chains has to make the decision NOT to pursue particular cases, monery should not come in to it.
    MICK
    23rd Feb 2015
    3:56pm
    Spot on. ASIC has a very poor reputation. My experience of ASIC is that it is staffed by a whole layer of letter writing bureaucrats who respond to correspondence but simply fob complainants off. So the problem is never fixed.
    What is the point of doing this? Consumers expect ASIC to have a go at the crooks, not ignore them. The latter is what the normal response is.
    Abby
    28th Feb 2015
    12:05pm
    Well said Mick and fly
    Richard
    23rd Feb 2015
    10:43am
    Another case of the Abbot Government kowtowing to big business especially the banks.
    Abby
    28th Feb 2015
    12:08pm
    Geee you sure look like Rob from MKR ... are you a cook too ?
    Patriot
    23rd Feb 2015
    10:46am
    I have only ONE message. UNITE, UNITE, UNITE.
    No matter that we THINK we have some differences - in the final washUp we are very much on "COMMON GROUNDS".
    The enemy is "Staring BOTH of us in the face" and, via the mechanism of "Conquer & Divide" they are attempting (and so far succeeding) to imply the Common Denominator of SLAVE to ALL OF US.
    As Abby said Yesterday
    WAKE UP and I'll add UNITE & (finally) EDUCATE & FIGHT to that.
    Otherwise, we are a happening that is not even reported in the History Books!
    MITZY
    23rd Feb 2015
    11:32am
    Debbie: Good comment. I agree with your final paragraph wholeheartedly. If this government gives largesse to these financial planners regardless of whether they are considered honest or devious some people will lose their hard-earned life-savings as they have done in the past for decades. How can a government be so dumb as to let this industry operate on fewer restrictions than they presently have. They have an obligation to everybody who has retirement funds/savings to ensure those savings are "safe". The alternative is an ever-increasing pension bill to the taxpayers.
    Patriot
    23rd Feb 2015
    11:37am
    Mitzy,
    They're not dumb!
    They don't give a "rats" about those who are NOT "Part-of-the-Pack".
    particolor
    23rd Feb 2015
    12:46pm
    A Royal Commission ? And another Reincarnated High Court Judge Who DESPERATLY Needs the Funds !! :-(
    BrianP
    23rd Feb 2015
    12:50pm
    There is a new movement of everyday Australians where you can have your say and change things for the better. It is called Australian Voice and here is the link to contact them http://goo.gl/forms/dTPI9peZmz

    This Government will go down in history for putting so many nails in the coffin of our Australian way of life. Also for widening the gap between rich and poor. They are so controlled by the big end of town.

    Safeguards are being removed leaving the way open for more people to be ripped off by unscrupulous businesses only interested in big profits.

    The Government is allowing more corruption into the system. And it is the people who are the most vulnerable who are suffering. Its time for us to speak up. Our whole future is at stake.
    biddi
    23rd Feb 2015
    1:44pm
    'page not found' ... 'does not exist'.
    Is this Australian Voice PARTY? Thanks.
    KSS
    23rd Feb 2015
    1:55pm
    Yup! Another party political broadcast!
    particolor
    23rd Feb 2015
    2:36pm
    I live at Lakemba and have no interest in Australian Politics !!
    MICK
    23rd Feb 2015
    3:59pm
    Give it a break Brian. I have contacted you and you are USELESS and simply trying to get votes. But there is no substance to you and from what I have seen you are simply an offshoot of the Liberal Party there to funnel votes to this government via your preferences in the next election.
    Tell this community the facts/truth.
    Abby
    28th Feb 2015
    12:10pm
    We get spammers at the Meeting Place too
    particolor
    23rd Feb 2015
    12:55pm
    A Royal Commission ? Get another name for it ! Or Someone will Knight the Exhumed High Court Judge,(who DESREATLY Needs the funds) Who sits on it with the Wisdom of a ...???
    Polly Esther
    23rd Feb 2015
    1:27pm
    I bags naming it a right Royal Flush, just like what Liz does when getting rid of her waste.
    particolor
    23rd Feb 2015
    4:11pm
    That's too disgusting to even comment on !! :-(
    biddi
    23rd Feb 2015
    1:07pm
    Yes, I AM worried about ASIC's reduction of funding. As this article states, we will be at the mercy of our financial planners. I visit my fiancial planner and he is aware of my lack of knowledge in this area. How would anyone know what they could be up to before it's too late?
    Sceptic
    23rd Feb 2015
    3:31pm
    If you have enough funds to need to consult a financial planner it is up to you to educate yourself enough to understand what the advice means to you. When I was living in Queensland I was inundated with material from Storm Financial. It did not take very much intelligence to see that the principals were spending (investors money) like drunken sailors and promising the earth in returns. I had no sympathy for the people that were caught up in the collapse as, like all of the get rich quick schemes, it was only their greed that had led most of them to that position. By taking notice of the old adage "if it looks too good to be true - it is" they would have been saved from their losses.
    MICK
    23rd Feb 2015
    4:03pm
    Works sometimes and with some people Sceptic. Sadly 'a fool and his money are quickly parted' so inept people are rife for being ripped off. This is where legislation is important (a recourse!!).
    This government has sought to undo the protections introduced by the previous government. The reason is obvious: this government is in bed with the corrupt institutions who every few years defraud and scam ordinary citizens of their life savings. When is it any different.
    I believe that voters need to begin asking about who is funding elections in this country.
    biddi
    23rd Feb 2015
    4:04pm
    Yes, Sireee.
    The plan was set by my cluey late husband.
    Perhaps I should take a savvy person along with me next meeting.
    It's not easy being beautiful and clever.
    KSS
    23rd Feb 2015
    1:25pm
    "Were you aware that NICRI is closing due to the removal of government funding?"

    I would like to know how many people actually accessed this service and the web site. Looking at the website there is nothing there that can not be accessed elsewhere. That being the case it would seem to me to be duplication of resources that is both unnecessary and therefore redundant.

    " For the last 25 years NICRI has provided information free of charge to retirees and pre-retirees on investment matters such as aged care funding, Centrelink benefits, financial planning strategies, financial counselling and more.Following the removal of government funding, the organisation will no longer be providing this valuable service."

    It is disingenuous to suggest that retirees and pre-retirees could get help at NICRI. They couldn't. All they got was an explanation of terminology and job roles e.g. "what is a reverse mortgage" or What does a financial planner do and how do I choose one?" It was NOT a free advisory service as was implied in the commentary above.

    The website clearly states:

    "NICRI does not give investment advice, recommend financial products or planners or undertake casework."

    So, again, I say this is a duplication of services that can easily and freely found elsewhere and does not need to come from a Government funded body. If cuts have to be made, better they come from this sort of redundant service than someone's pension, right?

    Perhaps redirest the money saved to ASIC!
    MICK
    23rd Feb 2015
    4:41pm
    Perhaps make the industries which cause the problems fund ASIC. A fitting outcome.
    Travellersjoy
    23rd Feb 2015
    3:47pm
    The LNP has no intention of helping ASIC get between their funders and supporters and the pot of gold that is seniors savings.
    We are sheep, for the shearing of; cows, for the milking of, and that's how the LNP see the world.
    Why anyone over age 25 years would vote for them is beyond me, unless they began with a silver spoon, of course.
    particolor
    23rd Feb 2015
    4:21pm
    Is that Sarah Something (Greens) a full Biscuit !! :-( I just heard on the News that 340 Million (or something like that) there for Security would be better spent on dissuading them not to be Radicalized in the first place ! WHAT !! and WTF ??
    I want to be the to Run around Giving Them All a Couple of Grand each to be Patriotic to Australia !! I'll be favourite Infidel of the Month !! :-)
    MICK
    23rd Feb 2015
    4:43pm
    Why would you help an organisation which was working against those who give you election funding? It does not surprise me one little bit that this government is bringing down another safeguard for ordinary Australians. The list continues to grow.
    digiom
    25th Feb 2015
    3:40pm
    Particolor - You seem to be the most intelligent poster on this site. Senator Sarah Hanson-Young is an absolute joke. She actually thought a soapie on TV was the authorities being filmed in accosting illegal fishing boats. LOL
    particolor
    25th Feb 2015
    5:10pm
    Dunno about that ? :-) But I do enjoy a Ridiculous Statement in Parliament when I hear one !!! :-) And that's OFTEN Nowadays !! :-)
    dougie
    23rd Feb 2015
    4:35pm
    The biggest is "personal greed". Be satisfied with a traditional return on your investment with the ability to utilise your funds when you so wish and guess what "No Problem".

    The old adage is true a fool and his money are soon parted. Be greedy and lose be satisfied with less and be happy.
    Young Simmo
    23rd Feb 2015
    5:42pm
    This is all way too complicated, boring and above my head.
    Can we get back to something serious and important like, "Senior Sex" or "Ways to win Spider Solitaire".
    particolor
    23rd Feb 2015
    7:19pm
    They are playing Daddy Long Legs Solitaire over there now Simmo !! :-)
    GM46
    23rd Feb 2015
    9:35pm
    Yes, I was aware that N.I.C.R.I. lost his funding, but probably because I knew of its existence and the service they provide (provided). I mourn the loss of a free and independent service, not linked with financial institutions, which purely provided independent information on the consequences of financial choices. They had vast knowledge in a number of areas, among them retirement, redundancy, reverse mortgages, types of investment and their pros and cons, Centrelink guidelines and others. I have contacted them several times for myself, and I have referred many people to them, to clarify their issues. What are we left with now? Financial planners, with a vested interest in the products they recommend?
    Not Senile Yet!
    23rd Feb 2015
    11:33pm
    Just as you voted the Liberal Puppets in ...you can vote them out as well!!!!
    Just do not make the mistake of voting any of the Other Party Puppets in to replace this lot!!!
    Vote for an Independent in Protest to the Party Corruption of OUR MP's......vote for one that has NOT Sold their vote to s Party!!!!
    The Cut Slash & Burn Liberal Caucus is pulling the strings now...but do not let the Other Mob's Caucus pull the strings either.....don't vote for the Corrupt Mongrels!!!!
    riodel
    24th Feb 2015
    3:17pm
    In reply to a comment below, I was one of many people who contacted NICRI over the past 20 years or so with questions about a small SMSF fund I managed as a Trustee. They did not give financial advice, but were extremely helpful in explaining the very complex nature of managing and who to contact in the very difficult management of these funds. They were a small office in Canberra and absolutely assisted me from the time I set up the fund to the time I arranged a windup. This was over a period of many years. I will miss the people in this office and think they should have been funded to assist people who will now be left to a lot of guesswork and extra headaches trying to find out how to follow the right procedures under the law.
    Rose
    24th Feb 2015
    7:44pm
    My husband's super gone with the Colonial's wind , I, the widow,am now told that cannot look for a compensation because they have no record of the investment .I ,of course, have all the papers of the policy purchased through the Wisdom Financial Planners . I have been the subject of intimidation and innuendos.
    The problem is deeper than the financial planners bad advice.The government protects dealers of any sort because think that they will make the nation prosper.Those who believed in sacrifices and saving , were attracted by the government adding to their savings, then they were forced to invest ,so that they will lose the lot on the market.
    It was all planned.That is the reason why dealers operate with such a confidence ,who will stop them? Will Australia benefit from that? I do not think so...
    Patriot
    24th Feb 2015
    7:55pm
    Rose,
    OUR Govt. and the DEALERS are ONE & the SAME
    ALL CRIMINALS
    particolor
    24th Feb 2015
    8:03pm
    And ASICK is looking into it !! :-)
    Young Simmo
    24th Feb 2015
    8:03pm
    Patriot, how can you call the Gov't criminals?
    When Tony just doubled my Age Pension then, my wife said, wake up and get out of bed, it is time to go to your 2nd job.
    jaybee
    11th Mar 2015
    4:32pm
    This government spends money on politically motivated RCs (unions, ceiling batts) but not on what appears to be a corrupt financial advisory industry. Those who reap the rewards of this apparent corruption support the current government and its weakening of consumer protection. And we do nothing about it. It hurts me to say this about a Liberal government, but with its lies, hypocrisy, bully-boy tactics, petulance and protection of its mates at the expense of the poor and disadvantaged, it is the most unethical and dishonest Australian government in the last 50 years, perhaps ever.
    particolor
    11th Mar 2015
    5:30pm
    I just went back 200 Years in History !! And I think Your Right :-(
    Patriot
    11th Mar 2015
    5:55pm
    jaybee
    As we get nearer to "Clinch Time" government pressure applied to the "Common People" gets indeed worse. ALL Governments ARE GUILTY!!!
    I agree with particolor, it's been happening from "Immediately after the Magna Carta & Haebius Corpus" documents were signed. Early 13th Century!
    Whilst the people thought that "Serfdom" was abandoned, Those who are driving that motif (Slavery) just took a different Tactic
    We were just "Too Stupid & trusting" to see it.
    "Clinch Time" is introduction of the NWO - Just around the corner!
    particolor
    11th Mar 2015
    6:25pm
    I was rustling through the Loco Forman's Cupboard one day looking for an Annual Leave Application, and came across a Nothing to Report- Report :-) ?
    I think I will lodge one of those Here :-) :-)


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