CBA ADVICE REMEDIATION BLOWS OUT ANOTHER $32M

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News

www.fsadvice.com.au

Volume 16 Issue 02 I 2021

Super fund offers roboadvice

A $5 billion superannuation fund is introducing a robo intra-fund advice solution to members.

With the help of Link Group’s Super Blueprint, legalsuper will offer the digital intra-fund advice to its 43,000 members. The offer builds on an existing partnership between Link and legalsuper.

Super Blueprint, which is also used by funds like Intrust Super, promises a personalised approach to delivering advice relating to investment choice, insurance, projected retirement needs and contributions.

Legalsuper chief executive Andrew Proebstl said extending the partnership with Link Group into digital advice is an exciting step for the fund.

“Through the use of APIs from Link Group’s market leading technology, we believe Super Blueprint will provide our members with even more benefits,” he said.

Link Advice chief executive Duncan McPherson commented: “Digital innovation is shaping the future of the super industry. The analytics and advice provided through Super Blueprint will give members a clear balance and benchmark for how their super is performing, this encourages more informed decisions on plans and a more positive attitude towards contribution.”

Link partnered with personal financial technology provider Moneysoft to streamline its advice offering for clients.

The new service, Link Advice Digital Fact Find, will enable super funds to configure fact-finds to their requirements, capturing the voice of the members that will ultimately improve the speed and accuracy of financial advice. fs The quote

Remediation amounts will not be known until individual cases have been reviewed and compensation offers made.

CBA adds $32m to advice remediation bill

Karren Vergara

The Commonwealth Bank has upped its indemnity bill to $252 million for dodgy financial advisers who were part of its former subsidiary Count Financial.

CBA sold off Count Financial to CountPlus in mid-2019. At the time, CBA provided $200 million in indemnity to CountPlus.

CBA announced the indemnity bill has ballooned but is within the limit of $300 million, which was agreed upon by both parties.

Count Financial paid the bank $2.5 million to purchase CountPlus, finalising the sale at the end of August 2019.

On 30 July 2020, CountPlus and CBA had entered into an agreement to increase the limit of that indemnity to $300 million.

“The potential for further increases to the indemnity limit remains under certain triggers relating to the failure rate for fee for no service remediation and the quantum of certain inappropriate advice remediation,” the two firms said in a joint statement.

“Remediation amounts will not be known until individual cases have been reviewed and compensation offers made.”

Count Financial is facing a class action for commissions paid to its financial advisers from 21 August 2014 to 21 August 2020.

The law firm Piper Alderman representing consumers alleged that Count Financial advisers failed to ensure their remuneration was free from conflict, among other failures that breached fiduciary duties.

StrategyOne Advice Network joined Count Financial, the latest firm to join the group, bringing the total network to 16 as at May.

In April, three former MLC firms joined Count Financial: Sapphire Coast Financial Services (formerly licensed through Godfrey Pembroke), Next Generation Financial planning (Meritum) and Aspire Financial Planning Group (Garvan).

Sapphire Coast Financial Services is the fourth firm to join Count Financial from Godfrey Pembroke, following the prior appointments of Ascent Private Wealth, Venture Financial Advisers and Plan Protect. fs

Adviser numbers at five-year low

The financial adviser population has reverted to the pre-financial services Royal Commission days, ending at 19,992 as at June 3.

Rainmaker analysis of ASIC’s Financial Adviser Register found that the total number of financial advisers has tapered off to levels experienced in 2016.

About five years ago, adviser numbers floated above 20,000 and peaked at nearly 30,000 at the end of 2018 as the Hayne Royal Commission was finalising its verdict.

This time last year, there were 22,307 advisers on the register. A year-on-year comparison marks an 11% drop in the total population. The SMSF Advisers Network (SAN), AMP Financial Planning, Morgans Financial, Business Services and Charter Financial Planning are the top five largest advice licensees.

SAN has the largest book of advisers at 763, but over the period farewelled 98.

SAN is operated by the National Tax and Accountants’ Association (NTAA) and provides a licensing solution for accountants to enable them to offer self-managed super funds and superannuation advice.

AMP FP netted 304 exits, paring down its representatives from 1038 to 734.

Morgans had 487 advisers, losing a net of 14 advisers for the year.

Synchron, the fourth-largest group by numbers, had 472 advisers, while Charter FP sits close behind with 427. fs