New York Attorney-General Eliot Spitzer is suing UBS Financial Services over alleged violation of state anti-fraud laws, common law fraud and breaches of fiduciary duty – and it’s all about behaviour that our little ASIC waves on through with little more than a finger wag.

AMP must be very glad it doesn’t run financial planners in New York as you could form the opinion that UBS is facing the courts for doing very similar things to what AMP has admitted doing. Indeed, much of the Australian funds management industry would fall foul of what the hairy-chested NY AG deems illegal.

Spitzer is alleging UBS defrauded customers of tens of millions of dollars by steering them into accounts with fees based on account assets rather than trading activity. As Money.cnn reports:

“Asset-based fee accounts are inappropriate for investors who rarely trade securities or hold significant amounts of cash, no-load mutual funds or other similar assets,” the attorney general’s office said in a statement.

Spitzer’s office also accused UBS of paying brokers who moved customers into the wrap accounts, creating a conflict of interest.

That sort of behaviour will sound terribly familiar to anyone who takes an interest in the way the Australian wealth management racket often works. Specifically, Spitzer’s action contrasts sharply with ASIC’s mild finger-wave at AMP for some of its financial planners switching customers out of well-performed low-fee industry super funds into higher-fee commission-paying AMP products.

AMP’s financial planners certainly have a conflict of interest, but ASIC doesn’t really care. The only action it has taken against AMP is to try to ensure customers are given a reason in writing for being switched. It’s even left it up to AMP to leave it up to AMP’s own conflicted planners to advise which customers might be offered a review of their advice. Whipped with a feather, savaged by a dead sheep, etc.

And AMP is by no means the worst offender in the game, but it was a convenient large target for ASIC to pretend to be doing something about after the scandal uncovered by its shadow shopping exercise.

If the watch puppy had gonads, it would be actively hanging a few conflicted planners and their Big End of Town paymasters to help concentrate the minds of the rest of the industry.