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Fact Check: ASIC has had the NCCP laws since gazetted in 2009 by Parliament and urgently so. ASIC
immediately granted the Big Banks an 18-month moratorium – ie exemption from prosecution.
The victims of 2004 demanded Parliament respond with new laws and that took 5 years because Labor did
not take over until 2007 and set new STRONG laws again under FoFa.
So the “new laws” did not become "law" until ASIC'S say so on 1 Jan 2011.
Consumer Interest delayed by ASIC for another 2 long years.
In 2013, Abbott and his bank buddies watered down FoFa constraints: NOT IN CONSUMER INTERESTS and
then ASIC attacks FP provider for NOT SERVICING in the client's BEST INTERESTS.
ASIC has launched its first case against a FP provider since three years of fiddling…………………..during an
election campaign.
ASIC stands accused and rightly so, of everything they have raised in court against NSG................hohum!
ASIC launches action against NSG Services in first FOFA 'best interests' case
Sydney Morning Herald June 8, 2016 - 11:12PM
Sally Rose
A financial planning company whose advisers allegedly tipped clients into costly products they didn't need is at the centre of a landmark court action by the corporate watchdog.
Melbourne's NSG Services on Wednesday because the first financial advice group to be taken to court under new consumer protection rules introduced nearly three years ago that require advisers to act in the "best interests" of their clients. The duty was introduced with the 2013 Future of Financial Advice (FOFA) reforms.
"ASIC alleges that NSG failed to take reasonable steps to ensure that its advisers complied with the best interests obligation when providing advice to clients; and as a result, on numerous occasions, NSG advisers did not act in the best interests of their clients," the financial regulator said in a statement.
"ASIC contends that NSG has trained its advisers that it is almost always in a client's best interest to take out some form of life risk insurance, regardless of a client's financial situation.
"On eight specific occasions, and because of advice provided by NSG advisers, clients were sold insurance and/or advised to rollover superannuation accounts that committed them to costly, unsuitable, and unnecessary financial arrangements."
he Australian Securities and Investments Commission began investigating NSG Services as early as 2014.
Improper selling techniques were identified within the firm by an ASIC "mystery shopper" surveillance sting aimed at uncovering dodgy practices in the life insurance sector sparking the first civil penalty action ASIC has taken against a licensee alleging breaches of the best interests duty and is seeking declarations of breaches and financial penalties.
The watchdog said NSG appeared to have failed to update its written policies relating to legal and regulatory compliance and risk management to be FOFA compliant since the new rules were enforces nearly three years ago.
The 'best interests duty', which became mandatory on July 1, 2013, changed the law to place an explicit obligation on financial advisers to act in their clients' best interests.
Under the FOFA reforms licensed advisers must: act in their clients best interests, provide appropriate advice, warn clients when advice is based on incomplete or inaccurate information, and prioritise their clients' interests.
These new rules were designed to crackdown on dodgy and conflicted advice.
The FOFA reforms banned commissions on most financial products, with the exception of life insurance.
It is also alleged that NSG encouraged staff to load clients up with inappropriate life insurance, which directed hefty upfront and trailing commissions to the business.
It is also alleged that NSG has breached their obligations under FOFA by failing to conduct regular and substantive performance reviews of advisers and take action against those who broke the law.
The first hearing of the matter is listed before the Federal Court of Australia on July 8, 2016.
Fairfax Media was unable to contact NSG Services, which is still listed on its website as National Sterling, on Friday evening for comment.
The Melbourne-based company, which also has an Adelaide office, lists two executive directors on its website: Tony Tzouvelis and Fabian Secatore.
Do not worry Tony and Fabian ASIC will intentionally stuff this up in order to save the industry....not Consumers!