Showing posts with label conflict of interest. Show all posts
Showing posts with label conflict of interest. Show all posts

Monday, 21 January 2019

USA 2019: crazy continues to be order of the day (Part Three)


A look at the US politician so many Australian Liberal and Nationals MPs and senators admire and seek to emulate....


Daily Kos, 12 January 2019:

Most of Donald Trump's $35 million in real estate deals in 2018 came with a huge political footnote attached to them. A Forbes analysis found the largest deal, yielding $20 million to Trump, came from the sale of a $900 million federally subsidized housing complex in Brooklyn in which the Trump Organization had a 4 percent stake. 

The Department of Housing & Urban Development had to approve the sale. In other words, the Trump Organization, which is still owned by Trump, needed permission from HUD, which reports to Trump as pr*sident, to turn a profit through a Brooklyn real estate deal. And guess what: HUD greenlit the deal.

Trump also took in another $5.5 million from 36 units sold in a 64-story Las Vegas tower. The catch? About a third of those units were bought by buyers hiding behind limited liability companies so they wouldn't have to disclose their identities. In 2017, USA Today reported that during the two years before Trump became the GOP nominee, only 4 percent of Trump’s building units were acquired by LLCs. So now that Trump's pr*sident, anonymous people are lining his pockets with real estate purchases cloaked through LLCs.

Remember when Trump made a big show of stacking up all the paperwork he was signing in order to supposedly clear up his conflicts of interest and forfeit management of his businesses? Yeah, he's still getting that money.

Wednesday, 23 May 2018

Sometimes it is hard to believe how bone-achingly stupid governments can be…… Part One


Before the Abbott Coalition Government appointed John Lloyd Australian Public Service Commissioner in 2014 he was Director, Workplace Relations and Productivity at the far-right pressure group, the Institute for Public Affairs - so this was all but inevitable....


The Prime Minister's department has refused to release emails relating to the public service commissioner John Lloyd and a right-wing think tank, saying they could prejudice an investigation into a possible breach of the law.

Mr Lloyd has previously rejected suggestions he gave special access and research to the Institute of Public Affairs after Labor senators last year raised an email he sent to a member of the group with an attachment showing what he described as "generous" provisions in public service enterprise agreements.

A freedom of information request sought emails held by Department of Prime Minister and Cabinet secretary Martin Parkinson mentioning Mr Lloyd and the IPA, and dated from October 23, after senators referred to the email in a Senate estimates hearing.

The department responded to the request last month by refusing to release two emails in Dr Parkinson's inbox, dated December 20 and December 22.

"I am satisfied that disclosure secretary Peter Rush wrote.

Releasing the documents could also "reasonably be expected to prejudice the impartial adjudication of a particular case", Mr Rush said.

One document is 30 pages long, and another is five pages.

The department and the Australian Public Service Commission have refused to answer repeated questions from Fairfax Media asking who is under investigation, who is conducting the probe, and the matters being investigated.

"The department has no comment," Prime Minister and Cabinet said in two separate statements.

The APS commission said it would not comment "on speculation about any investigation".

The issue of an investigation is still dogging John Lloyd and was addressed at a Finance And Public Administration Legislation Committee Estimates hearing on 21 May 2018, where at 1:57pm Lloyd went from professing unfamiliarity with a government act relevant to his current situation to this…….

Fairfax Media journalist tweeting about Senate Estimates hearing, 21 May 2018:

Yes, the Federal Coalition Government really opted for a member of the brains trust with  the appointment of John Lloyd.

Wednesday, 31 January 2018

ASIC reveals that AMP, ANZ, CBA, NAB & Westpac unlikely to act in customers' best interests


"The financial advice arms of Australia’s biggest banks have come under fire again, with the corporate watchdog finding their advisers failed to comply with the best interests of customers in 75% of advice files reviewed." [The Guardian, 24 January 2018]

Australian Securities and Investments Commission (ASIC), media release, 24 January 2018:

18-019MR ASIC reports on how large financial institutions manage conflicts of interest in financial advice

An Australian Securities and Investments Commission (ASIC) review of financial advice provided by the five biggest vertically integrated financial institutions has identified areas where improvements are needed to the management of conflicts of interest.

The review looked at the products that ANZ, CBA, NAB, Westpac and AMP financial advice licensees were recommending and at the quality of the advice provided on in-house products.

The review was part of a broader set of regulatory reviews of the wealth management and financial advice businesses of the largest banking and financial services institutions as part of ASIC's Wealth Management Project.

The review found that, overall, 79% of the financial products on the firms' approved products lists (APL) were external products and 21% were internal or 'in-house' products. However, 68% of clients’ funds were invested in in-house products.
The split between internal and external product sales varied across different licensees and across different types of financial products. For example, it was more pronounced for platforms compared to direct investments. However, in most cases there was a clear weighting in the products recommended by advisers towards in-house products.

ASIC noted that vertical integration can provide economies of scale and other benefits to both the customer and the financial institution. Consumers might choose advice from large vertically integrated firms because they seek that firm's products due to factors such as convenience and access, and recommendations of 'in-house' products may be appropriate. Nonetheless, conflicts of interest are inherent in vertically integrated firms, and these firms still need to properly manage conflicts of interest in their advisory arms and ensure good quality advice.

ASIC will consult with the financial advice industry (and other relevant groups) on a proposal to introduce more transparent public reporting on approved product lists, including where client funds are invested, for advice licensees that are part of a vertically integrated business. ASIC noted that any such requirement is likely to cover vertically integrated firms beyond those included in this review. The introduction of reporting requirements would improve transparency around management of the conflicts of interests that are inherent in these businesses.
ASIC also examined a sample of files to test whether advice to switch to in-house products satisfied the 'best interests' requirements. ASIC found that in 75% of the advice files reviewed the advisers did not demonstrate compliance with the duty to act in the best interests of their clients. Further, 10% of the advice reviewed was likely to leave the customer in a significantly worse financial position. ASIC will ensure that appropriate customer remediation takes place.

Acting ASIC Chair Peter Kell said that ASIC is already working with the major financial institutions to address the issues that have been identified in the report on quality of advice and management of conflicts of interest.

'There is ongoing work focusing on remediation where advice-related failures have led to poor customer outcomes, and the results of this review will feed into that work,' said Mr Kell.

ASIC is already working with the institutions to improve compliance and advice quality through action such as:
 
* improvements to monitoring and supervision processes for financial advisers; and
* improvements to adviser recruitment processes and checks. 
 
ASIC will continue to ban advisers with serious compliance failings.

ASIC highlighted that the findings from this review should be carefully examined by other vertically integrated firms. 'While this review focused on five major financial services firms, the lessons should be considered by all vertically integrated firms in the financial services sector.' 


Background 

The review took place during 2015 to 2017.

The licensees included as part of the review were: 

* AMP: AMP Financial Planning Pty Limited and Charter Financial Planning Limited;  
* ANZ: Millennium 3 Financial Planning Pty Ltd and ANZ Financial Planning; 
* CBA: Count Financial Limited and Commonwealth Financial Planning Limited;
* NAB: GWM Adviser Services Limited and NAB Financial Planning;
* Westpac: Securitor Financial Group Ltd and Westpac Financial Planning.