FSC to focus on charitable trust fee gouging

by |

The FSC has called for an extension of the Corporations and Market Advisory Committee (CAMAC) inquiry to ensure fees paid for the management of trusts are regulated and transparent.

Its particular focus will be on the charitable trust industry, which currently operates as a dual market, said FSC senior policy manager (trustees) Eve Brown.

"Currently there are hundreds of millions of dollars of charitable funds which are managed by unlicensed professional trustees that are not regulated under the corporations law," she said.

"These trustees are not subject to fee caps and some are charging more than double the legislated capped fees which apply to licensed trustee companies."

Under the corporations law, licensed trustees are prohibited from engaging in fee gouging. Fees are charged in line with the legislated fee caps or under an agreement with the creator of the trust.

Brown said the regulation around fee levels and disclosure must be applied to all professional trustees to ensure transparency and consistency in the industry.