AdviserVoiceSean Hughes Archives - AdviserVoice https://www.adviservoice.com.au/tag/sean-hughes/ Financial planner information & financial planner education/CPD - AdviserVoice Thu, 23 Jul 2026 20:30:20 +0000 en-US hourly 1 https://wordpress.org/?v=7.0.2 Banks urged to keep focus on deceased estates https://www.adviservoice.com.au/2026/07/banks-urged-to-keep-focus-on-deceased-estates/ https://www.adviservoice.com.au/2026/07/banks-urged-to-keep-focus-on-deceased-estates/#respond Thu, 09 Jul 2026 21:05:43 +0000 https://www.adviservoice.com.au/?p=112484

Sean Hughes

The Banking Code Compliance Committee (BCCC) has called on banks to keep a heightened focus on their management of deceased estates, after a review found that further work and commitment is needed to ensure improvements are working in practice. 

In its report, Managing deceased estates: A follow-up review, the BCCC reviewed how 11 banks had responded to its recommendations for improving deceased estate management. 

Eight of the 11 banks included in the review have taken steps to implement changes aligned to the BCCC’s 2023 recommendations, including improvements to systems, processes, product identification, monitoring arrangements and staff training. 

Chair of the BCCC Sean Hughes said the follow-up review demonstrated the BCCC’s work had contributed to improvements across the industry. 

“This follow-up reveals that most banks – but not all – have acted in response to the 2023 report. The majority appear to have taken the findings and recommendations seriously and implemented important changes,” Mr Hughes said. 

“Managing a deceased estate can involve grief, financial pressure, uncertainty and unfamiliar legal or banking processes. When banks improve these processes, they reduce the risk of delays, confusion and unnecessary distress for representatives. They instil trust, which is core to their relationship with any customer. 

“Banks need to ensure their processes are accurate, timely and easy to navigate. This is a matter of good customer service and central to meeting their commitments in the Banking Code of Practice.” 

However, the BCCC’s follow-up review found that some banks continue to rely on manual processes, fragmented arrangements or underdeveloped monitoring and quality assurance. Three banks identified further work was required in key areas, including quality assurance frameworks, fee identification controls and staff training. 

Mr Hughes said banks with unresolved weaknesses had been on notice for long enough and they should expect more formal and targeted engagement from the BCCC.  

“These are not new issues, nor are they particularly complicated or expensive to repair,” Mr Hughes said. 

“We made clear recommendations to the industry and gave banks ample time to review their practices. If gaps still remain, we may consider further investigation and formal action. 

“Banks with deficiencies in their estate practices must address these as a priority. Every bank must be able to show that its processes for managing deceased estates work in practice. That means being able to identify relevant products, act within required timeframes, communicate clearly and compassionately, maintain effective records, and monitor whether the process is operating as intended.” 

Following its 2023 inquiry, the BCCC undertook targeted investigations into three banks for non-compliance with Code commitments regarding deceased estates. All three banks were sanctioned for serious and systemic non-compliance, with ANZ and Bank of Queensland subject to naming sanctions. 

The BCCC will continue to monitor management of deceased estates and may initiate targeted investigative activities into banks that fail to address weaknesses with their deceased estate management processes and practices. 

]]>

Sean Hughes

The Banking Code Compliance Committee (BCCC) has called on banks to keep a heightened focus on their management of deceased estates, after a review found that further work and commitment is needed to ensure improvements are working in practice. 

In its report, Managing deceased estates: A follow-up review, the BCCC reviewed how 11 banks had responded to its recommendations for improving deceased estate management. 

Eight of the 11 banks included in the review have taken steps to implement changes aligned to the BCCC’s 2023 recommendations, including improvements to systems, processes, product identification, monitoring arrangements and staff training. 

Chair of the BCCC Sean Hughes said the follow-up review demonstrated the BCCC’s work had contributed to improvements across the industry. 

“This follow-up reveals that most banks – but not all – have acted in response to the 2023 report. The majority appear to have taken the findings and recommendations seriously and implemented important changes,” Mr Hughes said. 

“Managing a deceased estate can involve grief, financial pressure, uncertainty and unfamiliar legal or banking processes. When banks improve these processes, they reduce the risk of delays, confusion and unnecessary distress for representatives. They instil trust, which is core to their relationship with any customer. 

“Banks need to ensure their processes are accurate, timely and easy to navigate. This is a matter of good customer service and central to meeting their commitments in the Banking Code of Practice.” 

However, the BCCC’s follow-up review found that some banks continue to rely on manual processes, fragmented arrangements or underdeveloped monitoring and quality assurance. Three banks identified further work was required in key areas, including quality assurance frameworks, fee identification controls and staff training. 

Mr Hughes said banks with unresolved weaknesses had been on notice for long enough and they should expect more formal and targeted engagement from the BCCC.  

“These are not new issues, nor are they particularly complicated or expensive to repair,” Mr Hughes said. 

“We made clear recommendations to the industry and gave banks ample time to review their practices. If gaps still remain, we may consider further investigation and formal action. 

“Banks with deficiencies in their estate practices must address these as a priority. Every bank must be able to show that its processes for managing deceased estates work in practice. That means being able to identify relevant products, act within required timeframes, communicate clearly and compassionately, maintain effective records, and monitor whether the process is operating as intended.” 

Following its 2023 inquiry, the BCCC undertook targeted investigations into three banks for non-compliance with Code commitments regarding deceased estates. All three banks were sanctioned for serious and systemic non-compliance, with ANZ and Bank of Queensland subject to naming sanctions. 

The BCCC will continue to monitor management of deceased estates and may initiate targeted investigative activities into banks that fail to address weaknesses with their deceased estate management processes and practices. 

The post Banks urged to keep focus on deceased estates appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2026/07/banks-urged-to-keep-focus-on-deceased-estates/feed/ 0 Former ASIC Commissioner Sean Hughes appointed Chair of the Banking Code Compliance Committee https://www.adviservoice.com.au/2026/01/former-asic-commissioner-sean-hughes-appointed-chair-of-the-banking-code-compliance-committee/ https://www.adviservoice.com.au/2026/01/former-asic-commissioner-sean-hughes-appointed-chair-of-the-banking-code-compliance-committee/#respond Sun, 18 Jan 2026 20:20:54 +0000 https://www.adviservoice.com.au/?p=108596 The Australian Financial Complaints Authority (AFCA) and the Australian Banking Association (ABA) have jointly appointed former ASIC Commissioner Sean Hughes as the next Chair of the Banking Code Compliance Committee (BCCC).

Mr Sean Hughes is currently General Counsel for Vanguard Investments Australia and brings deep expertise in financial services regulation, law, corporate governance and risk oversight.

Mr Hughes served as a Commissioner at ASIC from 2018 to 2023, where he played a key role in implementing the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

During his time at ASIC, he also led regulatory oversight of a number of sectors, including banking, credit and payment systems, and ASIC’s response to COVID-related hardship measures for bank customers.

Prior to ASIC, Mr Hughes held senior leadership roles including Group General Counsel at Tabcorp, Chief Risk and Legal Officer at UniSuper, and Chief Executive Officer of New Zealand’s Financial Markets Authority.

As Chair, Mr Hughes will oversee the Committee’s monitoring of Code compliance, commencing a three-year term in early 2026, taking over from outgoing Chair Mr Ian Govey AM.

“Sean brings extensive experience to this role and will be a huge asset to the committee as it continues its work promoting compliance with the code, and by doing so, creating fairer outcomes for consumers,” said AFCA Chief Ombudsman and Chief Executive Officer David Locke.

“I would like to thank outgoing Chair Ian Govey AM for his service and guidance over the past six years. Ian has made a significant contribution strengthening the committee’s oversight of the code and improving outcomes for consumers,” said Mr Locke.

]]> The Australian Financial Complaints Authority (AFCA) and the Australian Banking Association (ABA) have jointly appointed former ASIC Commissioner Sean Hughes as the next Chair of the Banking Code Compliance Committee (BCCC).

Mr Sean Hughes is currently General Counsel for Vanguard Investments Australia and brings deep expertise in financial services regulation, law, corporate governance and risk oversight.

Mr Hughes served as a Commissioner at ASIC from 2018 to 2023, where he played a key role in implementing the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

During his time at ASIC, he also led regulatory oversight of a number of sectors, including banking, credit and payment systems, and ASIC’s response to COVID-related hardship measures for bank customers.

Prior to ASIC, Mr Hughes held senior leadership roles including Group General Counsel at Tabcorp, Chief Risk and Legal Officer at UniSuper, and Chief Executive Officer of New Zealand’s Financial Markets Authority.

As Chair, Mr Hughes will oversee the Committee’s monitoring of Code compliance, commencing a three-year term in early 2026, taking over from outgoing Chair Mr Ian Govey AM.

“Sean brings extensive experience to this role and will be a huge asset to the committee as it continues its work promoting compliance with the code, and by doing so, creating fairer outcomes for consumers,” said AFCA Chief Ombudsman and Chief Executive Officer David Locke.

“I would like to thank outgoing Chair Ian Govey AM for his service and guidance over the past six years. Ian has made a significant contribution strengthening the committee’s oversight of the code and improving outcomes for consumers,” said Mr Locke.

The post Former ASIC Commissioner Sean Hughes appointed Chair of the Banking Code Compliance Committee appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2026/01/former-asic-commissioner-sean-hughes-appointed-chair-of-the-banking-code-compliance-committee/feed/ 0 Commissioner Sean Hughes to depart ASIC https://www.adviservoice.com.au/2023/01/commissioner-sean-hughes-to-depart-asic/ https://www.adviservoice.com.au/2023/01/commissioner-sean-hughes-to-depart-asic/#respond Wed, 18 Jan 2023 20:35:39 +0000 https://www.adviservoice.com.au/?p=86782 ASIC Commissioner Sean Hughes will end his term as Commissioner on 3 February 2023, after accepting a role in the commercial sector.

ASIC Chair Joe Longo said ‘We are grateful for the contribution Sean has made to ASIC in his role as Commissioner and wish him well in the next stage of his career.’

Mr Hughes was due to end his five-year term on 1 December 2023. The appointment of an ASIC commissioner is determined by the Treasurer.

ASIC’s Commission will continue to work via a whole-of-ASIC approach, with current members Chair Longo, Deputy Chairs Sarah Court and Karen Chester, and Commissioner Danielle Press, working with the Chief Operating Officer and the Executive Team.

Background

Mr Hughes has had previous senior positions with ASIC, including from 2008-2010 as Senior Executive Leader for Corporate Governance and Corporations. From 1999-2003, he held a number of senior executive roles including as Director, Financial Services Regulation.

]]> ASIC Commissioner Sean Hughes will end his term as Commissioner on 3 February 2023, after accepting a role in the commercial sector.

ASIC Chair Joe Longo said ‘We are grateful for the contribution Sean has made to ASIC in his role as Commissioner and wish him well in the next stage of his career.’

Mr Hughes was due to end his five-year term on 1 December 2023. The appointment of an ASIC commissioner is determined by the Treasurer.

ASIC’s Commission will continue to work via a whole-of-ASIC approach, with current members Chair Longo, Deputy Chairs Sarah Court and Karen Chester, and Commissioner Danielle Press, working with the Chief Operating Officer and the Executive Team.

Background

Mr Hughes has had previous senior positions with ASIC, including from 2008-2010 as Senior Executive Leader for Corporate Governance and Corporations. From 1999-2003, he held a number of senior executive roles including as Director, Financial Services Regulation.

The post Commissioner Sean Hughes to depart ASIC appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2023/01/commissioner-sean-hughes-to-depart-asic/feed/ 0 How to avoid ‘greenwashing’ for superannuation and managed funds https://www.adviservoice.com.au/2022/06/how-to-avoid-greenwashing-for-superannuation-and-managed-funds/ https://www.adviservoice.com.au/2022/06/how-to-avoid-greenwashing-for-superannuation-and-managed-funds/#respond Wed, 15 Jun 2022 21:45:32 +0000 https://www.adviservoice.com.au/?p=82740 ASIC has released an information sheet to help issuers avoid ‘greenwashing’ when offering or promoting sustainability-related products. The publication will also assist issuers to provide investors with the information they should have to make informed decisions.

ASIC considers ‘greenwashing’ as the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical.

ASIC undertook a ‘greenwashing’ review of a sample of superannuation and investment products and identified some areas for improvement. In particular, issuers in their disclosure and promotions need to:

  • use clear labels
  • define the sustainability terminology they use
  • clearly explain how sustainability considerations are factored into their investment strategy.

ASIC Deputy Chair Karen Chester said, ‘Managed funds and super funds are responding to the increasing investor demand for sustainability-focused investments. Investors are not only motivated by their values here, but also by long-term financial returns.

‘Transparency and trust are paramount as the market for these products continues to develop and grow. In our region alone, sustainability-labelled investments have more than doubled between 2019 and 2021. While globally, ESG assets are projected to exceed US$53 trillion by 2025 and represent more than a third of total assets under management.

‘Our information sheet is simply about helping issuers comply with their existing regulatory obligations. Labels or headline statements about a product’s green credentials should not be misleading. Being ‘true to label’ is not a nice-to-have, it’s a regulatory must-have. It’s also a must-have for investor confidence and trust. And a must-have for both fair and efficient market outcomes here. Misdirected investment here will inevitably be at great economic cost.

‘We have set out 9 important questions for issuers to ask themselves. We would hope and indeed expect issuers to review their practices against our information sheet,’ Ms Chester said.

ASIC Commissioner Sean Hughes added, ‘This is and will remain a priority area of focus. ASIC is continuing to monitor the market and will be looking for misleading claims about ESG and sustainability.

‘We are also appealing to industry and investors to alert us if you see suspected greenwashing in financial products.’

ASIC has also published new information to help investors assess if their values and goals align with a sustainability-related or ESG product.[1]

Commissioner Sean Hughes said, ‘In weighing up investment options that suit their values, we encourage consumers to look out for vague or ambiguous language or exaggerated marketing claims that lack a reasonable basis to support them.’

‘This is clearly an evolving area, which is attracting attention from investors, funds and policy-makers alike. ASIC will continue to monitor sustainability disclosure practices and will make changes to INFO 271 to ensure our information remains relevant, contemporaneous and useful.’

Download

Information Sheet 271: How to avoid greenwashing when offering or promoting sustainability-related products[2]

Background

ASIC regulates the way financial products are sold and distributed and the conduct of issuers offering financial services. Existing regulatory guidance sets out how issuers should meet their related obligations:

Regulatory Guide 65[3] sets out ASIC’s guidelines on how product issuers can meet their obligations under the PDS requirements to disclose how labour standards or environmental, social or ethical considerations are taken into account in investment decision making.

Regulatory Guide 234[4] contains good practice guidance when advertising financial products and services.

Regulatory Guide 168[5] gives policy guidance on preparing a PDS that complies with the PDS requirements.

In the 2020-21 Corporate Plan, ASIC indicated it would undertake a review to assess whether product issuers were engaging in ‘greenwashing’ that results in consumer harms.

Issuers means responsible entities of managed funds, corporate directors of corporate collective investment vehicles (CCIVs), and trustees of registrable superannuation entities.

ASIC is also engaged with international developments in this field and supports[6] the International Sustainability Standards Board giving priority to a standard on climate-related disclosures.

———

[1] https://moneysmart.gov.au/how-to-invest/environmental-social-governance-ESG-investing
[2] https://asic.gov.au/regulatory-resources/financial-services/how-to-avoid-greenwashing-when-offering-or-promoting-sustainability-related-products/
[3] https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-65-section-1013da-disclosure-guidelines/
[4] https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-234-advertising-financial-products-and-services-including-credit-good-practice-guidance/
[5] https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-168-disclosure-product-disclosure-statements-and-other-disclosure-obligations/
[6] https://asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-349mr-asic-welcomes-new-international-sustainability-standards-board-and-updated-climate-related-disclosure-guidance/
]]> ASIC has released an information sheet to help issuers avoid ‘greenwashing’ when offering or promoting sustainability-related products. The publication will also assist issuers to provide investors with the information they should have to make informed decisions.

ASIC considers ‘greenwashing’ as the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical.

ASIC undertook a ‘greenwashing’ review of a sample of superannuation and investment products and identified some areas for improvement. In particular, issuers in their disclosure and promotions need to:

  • use clear labels
  • define the sustainability terminology they use
  • clearly explain how sustainability considerations are factored into their investment strategy.

ASIC Deputy Chair Karen Chester said, ‘Managed funds and super funds are responding to the increasing investor demand for sustainability-focused investments. Investors are not only motivated by their values here, but also by long-term financial returns.

‘Transparency and trust are paramount as the market for these products continues to develop and grow. In our region alone, sustainability-labelled investments have more than doubled between 2019 and 2021. While globally, ESG assets are projected to exceed US$53 trillion by 2025 and represent more than a third of total assets under management.

‘Our information sheet is simply about helping issuers comply with their existing regulatory obligations. Labels or headline statements about a product’s green credentials should not be misleading. Being ‘true to label’ is not a nice-to-have, it’s a regulatory must-have. It’s also a must-have for investor confidence and trust. And a must-have for both fair and efficient market outcomes here. Misdirected investment here will inevitably be at great economic cost.

‘We have set out 9 important questions for issuers to ask themselves. We would hope and indeed expect issuers to review their practices against our information sheet,’ Ms Chester said.

ASIC Commissioner Sean Hughes added, ‘This is and will remain a priority area of focus. ASIC is continuing to monitor the market and will be looking for misleading claims about ESG and sustainability.

‘We are also appealing to industry and investors to alert us if you see suspected greenwashing in financial products.’

ASIC has also published new information to help investors assess if their values and goals align with a sustainability-related or ESG product.[1]

Commissioner Sean Hughes said, ‘In weighing up investment options that suit their values, we encourage consumers to look out for vague or ambiguous language or exaggerated marketing claims that lack a reasonable basis to support them.’

‘This is clearly an evolving area, which is attracting attention from investors, funds and policy-makers alike. ASIC will continue to monitor sustainability disclosure practices and will make changes to INFO 271 to ensure our information remains relevant, contemporaneous and useful.’

Download

Information Sheet 271: How to avoid greenwashing when offering or promoting sustainability-related products[2]

Background

ASIC regulates the way financial products are sold and distributed and the conduct of issuers offering financial services. Existing regulatory guidance sets out how issuers should meet their related obligations:

Regulatory Guide 65[3] sets out ASIC’s guidelines on how product issuers can meet their obligations under the PDS requirements to disclose how labour standards or environmental, social or ethical considerations are taken into account in investment decision making.

Regulatory Guide 234[4] contains good practice guidance when advertising financial products and services.

Regulatory Guide 168[5] gives policy guidance on preparing a PDS that complies with the PDS requirements.

In the 2020-21 Corporate Plan, ASIC indicated it would undertake a review to assess whether product issuers were engaging in ‘greenwashing’ that results in consumer harms.

Issuers means responsible entities of managed funds, corporate directors of corporate collective investment vehicles (CCIVs), and trustees of registrable superannuation entities.

ASIC is also engaged with international developments in this field and supports[6] the International Sustainability Standards Board giving priority to a standard on climate-related disclosures.

———

[1] https://moneysmart.gov.au/how-to-invest/environmental-social-governance-ESG-investing
[2] https://asic.gov.au/regulatory-resources/financial-services/how-to-avoid-greenwashing-when-offering-or-promoting-sustainability-related-products/
[3] https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-65-section-1013da-disclosure-guidelines/
[4] https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-234-advertising-financial-products-and-services-including-credit-good-practice-guidance/
[5] https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-168-disclosure-product-disclosure-statements-and-other-disclosure-obligations/
[6] https://asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-349mr-asic-welcomes-new-international-sustainability-standards-board-and-updated-climate-related-disclosure-guidance/

The post How to avoid ‘greenwashing’ for superannuation and managed funds appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2022/06/how-to-avoid-greenwashing-for-superannuation-and-managed-funds/feed/ 0 ASIC helps young people Get Moneysmart https://www.adviservoice.com.au/2022/03/asic-helps-young-people-get-moneysmart/ https://www.adviservoice.com.au/2022/03/asic-helps-young-people-get-moneysmart/#respond Sun, 20 Mar 2022 20:40:31 +0000 https://www.adviservoice.com.au/?p=80683 57% of young people want to learn more about investing, 54% want to make the most of their money, and now, more than ever, young people are visiting ASIC’s Moneysmart website to help them make informed money decisions.

ASIC surveyed 3,000 Australians aged 15 to 21, to better understand the money challenges young Australians face. The results provided insight into how young people learn about and engage with money, and how they feel about their finances.

To support young people make money choices that work for them, and to recognise Global Money Week (21-27 March), ASIC has released Get Moneysmart. This new resource is designed to make it easier for young people to manage their money and deepen their understanding of key money concepts and behaviours.

‘Many young Australians are active consumers with multifaceted financial lives. They are handling money, setting savings goals, shopping online, using debit cards and making payments with their phones.

‘As they move into their final years of school, they are making decisions around pursuing further education, employment, and moving out of home’, said ASIC Commissioner Sean Hughes.

ASIC convened an Expert Group on the financial wellbeing of young Australians and established a number of working groups that included educators, parents, academics, industry, and importantly young people (see 20-110MR). This activity contributed to ASIC’s ongoing research and effort to support young people, and informed ASIC’s young people and money report released in December 2021.

Dr Phil Lambert, Chair, ASIC’s Expert group confirms the importance of this work: ‘It is hard to fathom why such a fundamental life competency as managing money is left to chance, rarely discussed in a young person’s life journey and where responsibility is shared by many but rests heavily on the individual to stride confidently, tread cautiously or wander aimlessly along the way.’

The work of the Expert Group, along with the findings of ASIC’s young people and money surveys, have provided a greater understanding of the context young people make financial decisions in. It has also highlighted the importance of financial firsts and the role of timely consumer education. These insights have informed the development of the new Moneysmart resource, ‘Get Moneysmart’.

Get Moneysmart is a suite of videos, tools and calculators to help young people with everyday money decisions. It offers practical tips to help them make informed money decisions, manage an income, track their spending and plan for the future.

‘Get Moneysmart encourages young people to make a money plan and feel more in control of their financial lives.

‘Learning early how to manage money, make informed choices, save and plan for the future, helps young people be more prepared for significant financial decisions later in life, as well as guard against common pitfalls and unnecessary risks’, Commissioner Hughes concluded.

Key findings from the survey include:

Theme Key finding
Managing spending and debt 54% of respondents want to learn how to manage money well and not waste it
Making an investment plan 57% of respondents reported wanting to learn about how to invest, ways to invest, types of investments and possible risks and returns
Understanding superannuation 62% of respondents agreed that ‘I think it’s important to start building up my superannuation while I’m young’
Avoiding scams 22% of respondents experienced a situation where they felt ripped off, taken advantage of financially or didn’t understand what something would cost them until it was too late
Dealing with money stress 51% of respondents agreed with the statement ‘I often feel stressed about money’

Background

ASIC’s Moneysmart resources support the Agency’s consumer education responsibilities. Moneysmart promotes confident and informed participation by investors and consumers in the Australian financial system and is aligned to ASIC’s regulatory mission to help Australians to be in control of their financial lives.

Every day around 40,000 Australians visit ASIC’s Moneysmart website – Moneysmart is recognised as a trusted source of information for consumers and investors and a starting point for the many financial decisions people make every day.

Global Money Week is an annual global awareness-raising campaign lead by the OECD International Network on Financial Education (OECD/INFE). The theme for 2022 is “Build your future, be smart about money” and focuses on the importance of ensuring young people, from an early age, are financially aware, and are acquiring the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve financial well-being and financial resilience. The global campaign will run from 21-27 March 2022.

]]> 57% of young people want to learn more about investing, 54% want to make the most of their money, and now, more than ever, young people are visiting ASIC’s Moneysmart website to help them make informed money decisions.

ASIC surveyed 3,000 Australians aged 15 to 21, to better understand the money challenges young Australians face. The results provided insight into how young people learn about and engage with money, and how they feel about their finances.

To support young people make money choices that work for them, and to recognise Global Money Week (21-27 March), ASIC has released Get Moneysmart. This new resource is designed to make it easier for young people to manage their money and deepen their understanding of key money concepts and behaviours.

‘Many young Australians are active consumers with multifaceted financial lives. They are handling money, setting savings goals, shopping online, using debit cards and making payments with their phones.

‘As they move into their final years of school, they are making decisions around pursuing further education, employment, and moving out of home’, said ASIC Commissioner Sean Hughes.

ASIC convened an Expert Group on the financial wellbeing of young Australians and established a number of working groups that included educators, parents, academics, industry, and importantly young people (see 20-110MR). This activity contributed to ASIC’s ongoing research and effort to support young people, and informed ASIC’s young people and money report released in December 2021.

Dr Phil Lambert, Chair, ASIC’s Expert group confirms the importance of this work: ‘It is hard to fathom why such a fundamental life competency as managing money is left to chance, rarely discussed in a young person’s life journey and where responsibility is shared by many but rests heavily on the individual to stride confidently, tread cautiously or wander aimlessly along the way.’

The work of the Expert Group, along with the findings of ASIC’s young people and money surveys, have provided a greater understanding of the context young people make financial decisions in. It has also highlighted the importance of financial firsts and the role of timely consumer education. These insights have informed the development of the new Moneysmart resource, ‘Get Moneysmart’.

Get Moneysmart is a suite of videos, tools and calculators to help young people with everyday money decisions. It offers practical tips to help them make informed money decisions, manage an income, track their spending and plan for the future.

‘Get Moneysmart encourages young people to make a money plan and feel more in control of their financial lives.

‘Learning early how to manage money, make informed choices, save and plan for the future, helps young people be more prepared for significant financial decisions later in life, as well as guard against common pitfalls and unnecessary risks’, Commissioner Hughes concluded.

Key findings from the survey include:

Theme Key finding
Managing spending and debt 54% of respondents want to learn how to manage money well and not waste it
Making an investment plan 57% of respondents reported wanting to learn about how to invest, ways to invest, types of investments and possible risks and returns
Understanding superannuation 62% of respondents agreed that ‘I think it’s important to start building up my superannuation while I’m young’
Avoiding scams 22% of respondents experienced a situation where they felt ripped off, taken advantage of financially or didn’t understand what something would cost them until it was too late
Dealing with money stress 51% of respondents agreed with the statement ‘I often feel stressed about money’

Background

ASIC’s Moneysmart resources support the Agency’s consumer education responsibilities. Moneysmart promotes confident and informed participation by investors and consumers in the Australian financial system and is aligned to ASIC’s regulatory mission to help Australians to be in control of their financial lives.

Every day around 40,000 Australians visit ASIC’s Moneysmart website – Moneysmart is recognised as a trusted source of information for consumers and investors and a starting point for the many financial decisions people make every day.

Global Money Week is an annual global awareness-raising campaign lead by the OECD International Network on Financial Education (OECD/INFE). The theme for 2022 is “Build your future, be smart about money” and focuses on the importance of ensuring young people, from an early age, are financially aware, and are acquiring the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve financial well-being and financial resilience. The global campaign will run from 21-27 March 2022.

The post ASIC helps young people Get Moneysmart appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2022/03/asic-helps-young-people-get-moneysmart/feed/ 0 ASIC’s responsible lending appeal dismissed by the Full Federal Court https://www.adviservoice.com.au/2020/06/asics-responsible-lending-appeal-dismissed-by-the-full-federal-court/ https://www.adviservoice.com.au/2020/06/asics-responsible-lending-appeal-dismissed-by-the-full-federal-court/#respond Mon, 29 Jun 2020 21:40:39 +0000 https://adviservoice.com.au/?p=68811 On 10 September 2019, ASIC filed an appeal with the Federal Court of Australia against the decision of the Honourable Justice Perram regarding ASIC’s allegations against Westpac Banking Corporation (Westpac) for contraventions of responsible lending provisions of the National Consumer Credit Protection Act 2009 (Cth) (Credit Act). The matter was heard in February 2020 and yesterday the Full Federal Court handed down its majority decision two to one dismissing ASIC’s application.

ASIC took on the case against Westpac because we felt it was important for judicial clarification of a cornerstone legal obligation on lenders. The Credit Act imposes a number of legal obligations on credit providers, including the need to make reasonable inquiries about a borrower’s financial circumstances and capacity to service a loan. Credit providers must also verify the information obtained from borrowers and make an assessment of whether a loan is not unsuitable for the borrower.

On 1 March 2017, ASIC commenced Federal Court proceedings alleging that, during the period between December 2011 and March 2015, Westpac failed to properly assess whether borrowers could meet their repayment obligations before entering into home loan contracts (17‑048MR).

On 13 August 2019, the Federal Court found Westpac had not breached the responsible lending provisions of the Credit Act, as Perram J decided that a lender ‘may do what it wants in the assessment process’ (19‑210MR).

‘ASIC notes today’s majority judgment and will review each of the separate decisions carefully – including what additional measures or clarification may be required to support compliance with the Credit Act,’ said ASIC Commissioner Sean Hughes.

Background

In 2019, ASIC undertook a consultation process to update its responsible lending guidance (19‑342MR). As is ASIC’s usual practice, we will carefully consider the Court’s determination and any revisions that are necessary to our guidance.

]]> On 10 September 2019, ASIC filed an appeal with the Federal Court of Australia against the decision of the Honourable Justice Perram regarding ASIC’s allegations against Westpac Banking Corporation (Westpac) for contraventions of responsible lending provisions of the National Consumer Credit Protection Act 2009 (Cth) (Credit Act). The matter was heard in February 2020 and yesterday the Full Federal Court handed down its majority decision two to one dismissing ASIC’s application.

ASIC took on the case against Westpac because we felt it was important for judicial clarification of a cornerstone legal obligation on lenders. The Credit Act imposes a number of legal obligations on credit providers, including the need to make reasonable inquiries about a borrower’s financial circumstances and capacity to service a loan. Credit providers must also verify the information obtained from borrowers and make an assessment of whether a loan is not unsuitable for the borrower.

On 1 March 2017, ASIC commenced Federal Court proceedings alleging that, during the period between December 2011 and March 2015, Westpac failed to properly assess whether borrowers could meet their repayment obligations before entering into home loan contracts (17‑048MR).

On 13 August 2019, the Federal Court found Westpac had not breached the responsible lending provisions of the Credit Act, as Perram J decided that a lender ‘may do what it wants in the assessment process’ (19‑210MR).

‘ASIC notes today’s majority judgment and will review each of the separate decisions carefully – including what additional measures or clarification may be required to support compliance with the Credit Act,’ said ASIC Commissioner Sean Hughes.

Background

In 2019, ASIC undertook a consultation process to update its responsible lending guidance (19‑342MR). As is ASIC’s usual practice, we will carefully consider the Court’s determination and any revisions that are necessary to our guidance.

The post ASIC’s responsible lending appeal dismissed by the Full Federal Court appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2020/06/asics-responsible-lending-appeal-dismissed-by-the-full-federal-court/feed/ 0 ASIC publishes new regulatory guidance for mortgage brokers https://www.adviservoice.com.au/2020/06/asic-publishes-new-regulatory-guidance-for-mortgage-brokers/ https://www.adviservoice.com.au/2020/06/asic-publishes-new-regulatory-guidance-for-mortgage-brokers/#respond Wed, 24 Jun 2020 21:45:08 +0000 https://adviservoice.com.au/?p=68687 ASIC has published regulatory guidance to assist in the application of the new best interests duty for mortgage brokers, which comes into effect in 2021.

The new obligations were legislated by the Parliament in response to Recommendation 1.2 of the Financial Services Royal Commission. From 1 January 2021, mortgage brokers will be required to act in the best interests of consumers and to prioritise consumers’ interests when providing credit assistance.

Consistent with this legislation, the guidance is high level and principles-based, but also incorporates practical worked examples. The purpose of the guidance is to explain the obligations introduced by the Government – it does not prescribe minimum standards of conduct, nor does it impose new or additional obligations.

Regulatory Guide 273 Mortgage brokers: Best interests duty (RG 273) contains ASIC’s views on how mortgage brokers may comply with their best interests obligations at key stages of the credit assistance process. It provides guidance on:

  • the effect of the range of credit providers and products brokers can access
  • recommending packages of credit products
  • the types of records that may be kept to demonstrate compliance.

Announcing the new guidance, ASIC Commissioner Sean Hughes said, ‘These are important and timely reforms for the mortgage broking industry and for customers shopping for a loan. This reform was legislated by the Parliament to improve the quality of credit assistance provided to consumers. ASIC supports that objective.

‘Consumers rightly expect mortgage brokers to act in their best interests and ASIC’s guidance describes how we expect them to do so. Under these new obligations, let there be no doubt – the consumer must always come first.

‘We released this regulatory guide as early as effectively possible, to help industry prepare on a timely basis for the best interests duty and related obligations before January 2021.’

From 1 January 2021, ASIC will closely monitor conduct and outcomes to ensure mortgage brokers are complying effectively with the best interests duty.

Alongside the new guidance, ASIC has also published a report responding to feedback received during the consultation process (REP 662).

Download

Background

In February 2019, the Parliament passed the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures) Act 2020, which introduced a best interests duty for mortgage brokers in response to Recommendation 1.2 of the Royal Commission. The duty is a statement of principle which seeks to align the interests of the mortgage broker with the interests and expectations of the consumer.

ASIC’s guidance will help mortgage brokers to comply with these legal obligations by setting out ASIC’s views on what the best interests duty provisions require and suggest the steps that can minimise the risk of non-compliance.

The guidance is structured around the key steps common to the credit assistance process of brokers, such as gathering information, individually assessing products, and presenting information and recommendations to the consumer.

The obligations were initially due to commence on 1 July 2019, but ASIC has provided a temporary exemption for six months in light of the effect of COVID-19 on the financial system.

ASIC consulted on draft guidance (CP 327) in February/March 2020. The submissions received in response to CP 327 helped to inform ASIC’s final guidance in Regulatory Guide 273. ASIC has published a feedback report, in response to the submissions received on CP 327, which outlines the changes made to the draft guidance and addresses stakeholder feedback.

]]> ASIC has published regulatory guidance to assist in the application of the new best interests duty for mortgage brokers, which comes into effect in 2021.

The new obligations were legislated by the Parliament in response to Recommendation 1.2 of the Financial Services Royal Commission. From 1 January 2021, mortgage brokers will be required to act in the best interests of consumers and to prioritise consumers’ interests when providing credit assistance.

Consistent with this legislation, the guidance is high level and principles-based, but also incorporates practical worked examples. The purpose of the guidance is to explain the obligations introduced by the Government – it does not prescribe minimum standards of conduct, nor does it impose new or additional obligations.

Regulatory Guide 273 Mortgage brokers: Best interests duty (RG 273) contains ASIC’s views on how mortgage brokers may comply with their best interests obligations at key stages of the credit assistance process. It provides guidance on:

  • the effect of the range of credit providers and products brokers can access
  • recommending packages of credit products
  • the types of records that may be kept to demonstrate compliance.

Announcing the new guidance, ASIC Commissioner Sean Hughes said, ‘These are important and timely reforms for the mortgage broking industry and for customers shopping for a loan. This reform was legislated by the Parliament to improve the quality of credit assistance provided to consumers. ASIC supports that objective.

‘Consumers rightly expect mortgage brokers to act in their best interests and ASIC’s guidance describes how we expect them to do so. Under these new obligations, let there be no doubt – the consumer must always come first.

‘We released this regulatory guide as early as effectively possible, to help industry prepare on a timely basis for the best interests duty and related obligations before January 2021.’

From 1 January 2021, ASIC will closely monitor conduct and outcomes to ensure mortgage brokers are complying effectively with the best interests duty.

Alongside the new guidance, ASIC has also published a report responding to feedback received during the consultation process (REP 662).

Download

Background

In February 2019, the Parliament passed the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures) Act 2020, which introduced a best interests duty for mortgage brokers in response to Recommendation 1.2 of the Royal Commission. The duty is a statement of principle which seeks to align the interests of the mortgage broker with the interests and expectations of the consumer.

ASIC’s guidance will help mortgage brokers to comply with these legal obligations by setting out ASIC’s views on what the best interests duty provisions require and suggest the steps that can minimise the risk of non-compliance.

The guidance is structured around the key steps common to the credit assistance process of brokers, such as gathering information, individually assessing products, and presenting information and recommendations to the consumer.

The obligations were initially due to commence on 1 July 2019, but ASIC has provided a temporary exemption for six months in light of the effect of COVID-19 on the financial system.

ASIC consulted on draft guidance (CP 327) in February/March 2020. The submissions received in response to CP 327 helped to inform ASIC’s final guidance in Regulatory Guide 273. ASIC has published a feedback report, in response to the submissions received on CP 327, which outlines the changes made to the draft guidance and addresses stakeholder feedback.

The post ASIC publishes new regulatory guidance for mortgage brokers appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2020/06/asic-publishes-new-regulatory-guidance-for-mortgage-brokers/feed/ 0 ASIC warns AFS licensees to meet financial reporting obligations on time https://www.adviservoice.com.au/2019/10/asic-warns-afs-licensees-to-meet-financial-reporting-obligations-on-time/ https://www.adviservoice.com.au/2019/10/asic-warns-afs-licensees-to-meet-financial-reporting-obligations-on-time/#respond Mon, 07 Oct 2019 20:45:15 +0000 https://adviservoice.com.au/?p=64267 ASIC is reminding all Australian Financial Services (AFS) licensees to lodge their annual financial statements and auditor reports by the due date as required under the Corporations Act 2001.

ASIC expects all AFS licensees to comply with the financial reporting requirements within the specified timeframe. Body corporate AFS licensees that are not disclosing entities, and have a financial year ending 30 June, are required to lodge their financial accounts by 31 October 2019. Limited AFS licensees that do not deal with client money must lodge an annual compliance certificate along with a profit and loss statement and a balance sheet each financial year, also by 31 October 2019.

AFS licensees that fail to meet their obligations before the due date risk regulatory consequences.

ASIC Commissioner Sean Hughes said, “Timely lodgement of financial statements and auditor reports with ASIC demonstrates an AFS licensee’s capacity to comply with financial services laws. Yet, we have observed a high rate of non-compliance – a number of licensees seem to be waiting for reminders from ASIC to adhere to this ongoing legal requirement.

“ASIC considers this an indicator of a poor compliance culture. We expect AFS licensees to have adequate policies and procedures in place to ensure they are able to meet their financial reporting obligations. ASIC is continuing to pursue AFS licensees who don’t comply and where appropriate, we will consider taking action to suspend or cancel a licence,” Mr Hughes said.

ASIC has previously contacted a number of AFS licensees that have not met their annual financial reporting requirements and where appropriate, taken action to ensure compliance with the law. Since October 2016, ASIC has suspended nine AFS licences and cancelled 22 AFS licences for failing to lodge their annual financial statements and auditor reports.

Background

For further information on the licence cancellations and suspensions from October 2016 to August 2019, please see the following media releases:

Financial year 2016-17

Financial year 2017-18

Financial year 2018-19

  • Independent Insurance Brokers Pty Ltd (18-224MR)
  • Austplan Pty Ltd (18-323MR)
  • Evermore Money Management Pty Ltd (18-382MR)
  • Guarded Pty Ltd (19-156MR)
  • Australasia Wealth Services and Management Pty Ltd (19-103MR)

Financial year 2019-2020

  • Australasia Wealth Services and Management Pty Ltd (19-173MR)
  • Golden Financial Group Pty Ltd (19-187MR)
]]> ASIC is reminding all Australian Financial Services (AFS) licensees to lodge their annual financial statements and auditor reports by the due date as required under the Corporations Act 2001.

ASIC expects all AFS licensees to comply with the financial reporting requirements within the specified timeframe. Body corporate AFS licensees that are not disclosing entities, and have a financial year ending 30 June, are required to lodge their financial accounts by 31 October 2019. Limited AFS licensees that do not deal with client money must lodge an annual compliance certificate along with a profit and loss statement and a balance sheet each financial year, also by 31 October 2019.

AFS licensees that fail to meet their obligations before the due date risk regulatory consequences.

ASIC Commissioner Sean Hughes said, “Timely lodgement of financial statements and auditor reports with ASIC demonstrates an AFS licensee’s capacity to comply with financial services laws. Yet, we have observed a high rate of non-compliance – a number of licensees seem to be waiting for reminders from ASIC to adhere to this ongoing legal requirement.

“ASIC considers this an indicator of a poor compliance culture. We expect AFS licensees to have adequate policies and procedures in place to ensure they are able to meet their financial reporting obligations. ASIC is continuing to pursue AFS licensees who don’t comply and where appropriate, we will consider taking action to suspend or cancel a licence,” Mr Hughes said.

ASIC has previously contacted a number of AFS licensees that have not met their annual financial reporting requirements and where appropriate, taken action to ensure compliance with the law. Since October 2016, ASIC has suspended nine AFS licences and cancelled 22 AFS licences for failing to lodge their annual financial statements and auditor reports.

Background

For further information on the licence cancellations and suspensions from October 2016 to August 2019, please see the following media releases:

Financial year 2016-17

Financial year 2017-18

Financial year 2018-19

  • Independent Insurance Brokers Pty Ltd (18-224MR)
  • Austplan Pty Ltd (18-323MR)
  • Evermore Money Management Pty Ltd (18-382MR)
  • Guarded Pty Ltd (19-156MR)
  • Australasia Wealth Services and Management Pty Ltd (19-103MR)

Financial year 2019-2020

  • Australasia Wealth Services and Management Pty Ltd (19-173MR)
  • Golden Financial Group Pty Ltd (19-187MR)

The post ASIC warns AFS licensees to meet financial reporting obligations on time appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2019/10/asic-warns-afs-licensees-to-meet-financial-reporting-obligations-on-time/feed/ 0 ASIC makes product intervention order banning short term lending model to protect consumers from predatory lending https://www.adviservoice.com.au/2019/09/asic-makes-product-intervention-order-banning-short-term-lending-model-to-protect-consumers-from-predatory-lending/ https://www.adviservoice.com.au/2019/09/asic-makes-product-intervention-order-banning-short-term-lending-model-to-protect-consumers-from-predatory-lending/#respond Sun, 15 Sep 2019 21:45:44 +0000 https://adviservoice.com.au/?p=63886 ASIC has used its product intervention power to ban a model of lending in the short term credit industry which has been found to cause significant consumer detriment.

In its first deployment of this power ASIC targeted a particular business model where a short term credit provider and its associate charged fees under separate contracts.

The law allows short term credit providers to remain exempt from credit licensing, conduct and responsible lending obligations under the National Consumer Credit Protection Act 2009, if the fees charged for a loan of up to 62 days do not exceed 5% of the loan amount and 24% per annum interest.

Under the short term lending model, the short term credit provider charged costs within these limitations, however its associate charged significant upfront, ongoing and default related fees under a separate contract for management and administrative services in relation to the loan. When combined, these fees can add up to almost 1000% of the loan amount.

The model has been used by Cigno Pty Ltd and Gold-Silver Standard Finance Pty Ltd, and more recently by MYFI Australia Pty Ltd and BHF Solutions Pty Ltd.

In making the order, ASIC considered:

  • submissions received in response to CP 316, with only 2 out of 35 submissions opposing ASIC’s proposed product intervention order;
  • data provided by industry participants, demonstrating the size and scale of the short term credit industry; and
  • ASIC complaints data in relation to the short term lending model, which comprised over 200 reports of misconduct, with the      majority being about excessive fees and charges.

The order does not seek to modify the existing exemption for short term credit; rather, it ensures that short term credit providers and their associates do not structure their businesses in a manner which allows them to charge fees which exceed the prescribed limits for regulated credit.

In announcing ASIC’s decision Commissioner Sean Hughes said “ASIC is ready and willing to use the new powers that it has been given. The product intervention power provides ASIC with the power and responsibility to address significant detriment caused by financial products, regardless of whether they are lawfully provided.

ASIC will take action where it identifies products that can or do cause significant consumer detriment. In this case, many financially vulnerable consumers incurred extremely high costs they could ill-afford, often leading to payment default that only added to their financial burden.”

The order is an industry wide order made by legislative instrument and will apply to any person that attempts to use this short term lending model or variations of the model. The order was registered with the Federal Register of Legislation on 12 September 2019 commencing on 14 September 2019 and remains in force for 18 months unless it is extended or made permanent. ASIC can extend the order’s duration or make it permanent, but only with Ministerial approval.

There are criminal and civil penalties for breaching the product intervention order, including up to 5 years imprisonment and fines of up to $1.26 million per offence.

Background

This decision follows ASIC’s consultation on the proposed intervention to stop consumer harm in short term credit.

In response to CP316, ASIC received 12 submissions from financial counselling services and legal community centres, 6 submissions from industry bodies and participants, and 17 submissions from aggrieved consumers who have been affected by the use of the short term lending model.

With the exception of submissions provided by current users of the short term lending model, the submissions supported ASIC’s finding of significant detriment caused by the short term lending model, and supported the making of ASIC’s proposed product intervention order.

ASIC was unsuccessful in civil proceedings in the Federal Court in 2014 involving an earlier use of this short term lending model by two entities Teleloans Pty Ltd and Finance & Loans Direct Pty Ltd (refer: 15-165MR).

ASIC is currently consulting on the proposed use of its product intervention power to address consumer harm to retail clients resulting from over-the-counter binary options and contracts for difference.

ASIC’s MoneySmart website has information about payday loans and alternatives and where to find free help with managing debt.

Download

]]> ASIC has used its product intervention power to ban a model of lending in the short term credit industry which has been found to cause significant consumer detriment.

In its first deployment of this power ASIC targeted a particular business model where a short term credit provider and its associate charged fees under separate contracts.

The law allows short term credit providers to remain exempt from credit licensing, conduct and responsible lending obligations under the National Consumer Credit Protection Act 2009, if the fees charged for a loan of up to 62 days do not exceed 5% of the loan amount and 24% per annum interest.

Under the short term lending model, the short term credit provider charged costs within these limitations, however its associate charged significant upfront, ongoing and default related fees under a separate contract for management and administrative services in relation to the loan. When combined, these fees can add up to almost 1000% of the loan amount.

The model has been used by Cigno Pty Ltd and Gold-Silver Standard Finance Pty Ltd, and more recently by MYFI Australia Pty Ltd and BHF Solutions Pty Ltd.

In making the order, ASIC considered:

  • submissions received in response to CP 316, with only 2 out of 35 submissions opposing ASIC’s proposed product intervention order;
  • data provided by industry participants, demonstrating the size and scale of the short term credit industry; and
  • ASIC complaints data in relation to the short term lending model, which comprised over 200 reports of misconduct, with the      majority being about excessive fees and charges.

The order does not seek to modify the existing exemption for short term credit; rather, it ensures that short term credit providers and their associates do not structure their businesses in a manner which allows them to charge fees which exceed the prescribed limits for regulated credit.

In announcing ASIC’s decision Commissioner Sean Hughes said “ASIC is ready and willing to use the new powers that it has been given. The product intervention power provides ASIC with the power and responsibility to address significant detriment caused by financial products, regardless of whether they are lawfully provided.

ASIC will take action where it identifies products that can or do cause significant consumer detriment. In this case, many financially vulnerable consumers incurred extremely high costs they could ill-afford, often leading to payment default that only added to their financial burden.”

The order is an industry wide order made by legislative instrument and will apply to any person that attempts to use this short term lending model or variations of the model. The order was registered with the Federal Register of Legislation on 12 September 2019 commencing on 14 September 2019 and remains in force for 18 months unless it is extended or made permanent. ASIC can extend the order’s duration or make it permanent, but only with Ministerial approval.

There are criminal and civil penalties for breaching the product intervention order, including up to 5 years imprisonment and fines of up to $1.26 million per offence.

Background

This decision follows ASIC’s consultation on the proposed intervention to stop consumer harm in short term credit.

In response to CP316, ASIC received 12 submissions from financial counselling services and legal community centres, 6 submissions from industry bodies and participants, and 17 submissions from aggrieved consumers who have been affected by the use of the short term lending model.

With the exception of submissions provided by current users of the short term lending model, the submissions supported ASIC’s finding of significant detriment caused by the short term lending model, and supported the making of ASIC’s proposed product intervention order.

ASIC was unsuccessful in civil proceedings in the Federal Court in 2014 involving an earlier use of this short term lending model by two entities Teleloans Pty Ltd and Finance & Loans Direct Pty Ltd (refer: 15-165MR).

ASIC is currently consulting on the proposed use of its product intervention power to address consumer harm to retail clients resulting from over-the-counter binary options and contracts for difference.

ASIC’s MoneySmart website has information about payday loans and alternatives and where to find free help with managing debt.

Download

The post ASIC makes product intervention order banning short term lending model to protect consumers from predatory lending appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2019/09/asic-makes-product-intervention-order-banning-short-term-lending-model-to-protect-consumers-from-predatory-lending/feed/ 0 ASIC research highlights the importance of reforms for mortgage brokers and home lending https://www.adviservoice.com.au/2019/09/asic-research-highlights-the-importance-of-reforms-for-mortgage-brokers-and-home-lending/ https://www.adviservoice.com.au/2019/09/asic-research-highlights-the-importance-of-reforms-for-mortgage-brokers-and-home-lending/#respond Sun, 01 Sep 2019 21:30:16 +0000 https://adviservoice.com.au/?p=63623 ASIC has released a report Looking for a mortgage: Consumer experiences and expectations in getting a home loan. As part of this research, ASIC followed over 300 consumers in the process of taking out a home loan and surveyed another 2,000 consumers.

This research examines consumer decision-making in relation to home loans to identify what factors influence their journey.

Key findings from our research include:

  • consumers who visit a mortgage broker expect the broker to find them the ‘best’ home loan
  • mortgage brokers were inconsistent in the ways they presented home loan options to consumers, sometimes offering little (if any) explanation of the options considered or reasons for their recommendation
  • first home buyers were more likely to take out their loan with a mortgage broker.

The report shows that consumers taking out a loan directly through a lender were more likely to be a refinancer or have had previous experience taking out home loans. Consumers who went directly to a lender valued convenience, with 69% taking out their loan with a lender they had an existing relationship with.

Taking out a home loan is a complex process and consumers told us it can be an ‘overwhelming’ experience. Although most consumers set out to find the best loan they could, 1 in 5 consumers believed that they could have got a better interest rate on their home loan or were not sure whether they had even got a good rate.

In launching ASIC’s report, Commissioner Sean Hughes said, ‘A home loan is one of the most important financial commitments a consumer will make. Lenders, brokers and aggregators must step up to make it easier for consumers to meaningfully compare loan options and for brokers to communicate how a home loan option has been selected for them.’

‘ASIC strongly supports the recent Government announcement to enact a best interests duty for mortgage brokers. Importantly, the implementation of such a duty will align the role of brokers to the reasonable expectations of consumers.’

‘Our research also suggests that some consumers are taking out home loans when cheaper alternatives may well exist. We are working with other regulators to develop a new home loan interest rate tool to improve price transparency for consumers to compare options. We expect this tool will be made available on ASIC’s MoneySmart website next year.’

Background

In March 2017, ASIC published the findings of our review into the effect of remuneration structures in the mortgage broking market on the quality of consumer outcomes: see Report 516 Review of mortgage broker remuneration (REP 516). We found that current remuneration practices create conflicts of interest that may contribute to poor consumer outcomes.

As part of this review we also found that consumers who obtained their loan through a broker:

  • borrow more
  • have higher loan to valuation ratios
  • spend more of their wage on a mortgage
  • take out more interest-only loans
  • get the same rate as customers that go directly to a lender.

ASIC’s MoneySmart website has information for consumers about choosing a home loan and using a broker.

Consumers can also use MoneySmart’s mortgage calculator to compare home loans and work out whether they can save money by switching to another mortgage.

Download

]]> ASIC has released a report Looking for a mortgage: Consumer experiences and expectations in getting a home loan. As part of this research, ASIC followed over 300 consumers in the process of taking out a home loan and surveyed another 2,000 consumers.

This research examines consumer decision-making in relation to home loans to identify what factors influence their journey.

Key findings from our research include:

  • consumers who visit a mortgage broker expect the broker to find them the ‘best’ home loan
  • mortgage brokers were inconsistent in the ways they presented home loan options to consumers, sometimes offering little (if any) explanation of the options considered or reasons for their recommendation
  • first home buyers were more likely to take out their loan with a mortgage broker.

The report shows that consumers taking out a loan directly through a lender were more likely to be a refinancer or have had previous experience taking out home loans. Consumers who went directly to a lender valued convenience, with 69% taking out their loan with a lender they had an existing relationship with.

Taking out a home loan is a complex process and consumers told us it can be an ‘overwhelming’ experience. Although most consumers set out to find the best loan they could, 1 in 5 consumers believed that they could have got a better interest rate on their home loan or were not sure whether they had even got a good rate.

In launching ASIC’s report, Commissioner Sean Hughes said, ‘A home loan is one of the most important financial commitments a consumer will make. Lenders, brokers and aggregators must step up to make it easier for consumers to meaningfully compare loan options and for brokers to communicate how a home loan option has been selected for them.’

‘ASIC strongly supports the recent Government announcement to enact a best interests duty for mortgage brokers. Importantly, the implementation of such a duty will align the role of brokers to the reasonable expectations of consumers.’

‘Our research also suggests that some consumers are taking out home loans when cheaper alternatives may well exist. We are working with other regulators to develop a new home loan interest rate tool to improve price transparency for consumers to compare options. We expect this tool will be made available on ASIC’s MoneySmart website next year.’

Background

In March 2017, ASIC published the findings of our review into the effect of remuneration structures in the mortgage broking market on the quality of consumer outcomes: see Report 516 Review of mortgage broker remuneration (REP 516). We found that current remuneration practices create conflicts of interest that may contribute to poor consumer outcomes.

As part of this review we also found that consumers who obtained their loan through a broker:

  • borrow more
  • have higher loan to valuation ratios
  • spend more of their wage on a mortgage
  • take out more interest-only loans
  • get the same rate as customers that go directly to a lender.

ASIC’s MoneySmart website has information for consumers about choosing a home loan and using a broker.

Consumers can also use MoneySmart’s mortgage calculator to compare home loans and work out whether they can save money by switching to another mortgage.

Download

The post ASIC research highlights the importance of reforms for mortgage brokers and home lending appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2019/09/asic-research-highlights-the-importance-of-reforms-for-mortgage-brokers-and-home-lending/feed/ 0