AFA cites adviser’s 15-hour ASIC ordeal
The Australian Securities and Investments Commission (ASIC) has in the past set the rules for the financial services when it did not necessarily have the power to do so.
In what represents one of its last submissions before merging with the Financial Planning Association (FPA), the Association of Financial Advisers (AFA) has told a Parliamentary inquiry that contrary to the views of the Royal Commission, ASIC has been a “vigorous regulator”.
“It is interesting to contrast the criticism that ASIC received about their approach, with the approach to regulatory oversight in other sectors, including the medical profession, where recent media coverage would suggest that there is a much looser regime,” the AFA submission said.
“A comparison of the penalties that have been applied to financial advisers for misconduct with those that apply to doctors, sometimes for very serious misconduct, highlights some significant differences,” it said.
“Over recent years there has also been coverage of other regulatory regimes, including the gambling sector and the construction industry, that highlights how vigorous ASIC has been in comparison.”
Discussing its contention that ASIC has gone beyond its powers in setting the financial services rules, the AFA submission said.
“We know that ASICs approach to investigations and enforcement creates a lot of angst and anxiety in the financial advice population, although impacted parties are often cautious about disclosing this to other parties, including professional associations.”
“The handling of the Fee for No Service remediation programs is something that we have been well aware of through repeated complaints from our members. We are also aware of one member who was the subject of an ASIC investigation and enforcement action that seemingly went for two and a half years, and ultimately ended in an enforceable undertaking,” the submission said.
“During this process, this member, despite receiving multiple ASIC notices, struggled greatly with having any meaningful interaction with ASIC, and ultimately chose to escalate the matter.”
“They also reported to us the experience of having a joint AFP/ASIC raid that went for 15 hours. They have advised us that there was no consumer detriment, which makes the actions that ASIC have taken seem excessive and unduly drawn out.
“We have been briefed on this and appreciate the huge toll that this matter has had on this individual, their family and their business. This is not the right vehicle to go into this matter in detail, however the comparison of what this person endured and the Melissa Caddick matter provides a remarkable contrast in terms of the severity of the matter from a client perspective, yet similar regulatory intervention. In our view, there needs to be some form of appeal channel or ombudsman for someone who is stuck in the middle of an investigation that they consider to be ineffective or excessive.”
I’m surprised it was only 15 hours.
ASIC needs to be removed from the regulation of financial advice. They are either directly or indirectly linked to 90% of the problems in our profession. Their efforts should be focused solely on fraudsters and imposters. Until we have a board of experienced, qualified, practicing financial planners in charge of our profession, nothing will improve and consumers will continue to be denied access to quality financial advice. That Levy decided ASIC should be in charge of record keeping requirements in place of SOA’s tells you everything you need to know about the QAR – it was a con job, designed to trick the foolish associations into supporting it, while in reality offering negligible benefits for financial planners.
ASIC is corrupt.
They hide their own malfeasance (using funds for personal legal advice, accepting ‘gifts’ from union super and then taking their register off public discovery, falsifying information to force LIF through, blatantly lying throughout the Royal Commission – and they’re just the ones off the top of my head!), and yet prosecute the smallest suspected issue with a FP – often erroneously with devastating affect, and yet no repercussions for ASIC or remediation for the planners.
ASIC has been overstepping the mark for at least the last 25 years. And with the connivance and assistance of the FPA.
ASIC regulatory guides arising from the introduction of Chapter 7 of the Corps Act consistently overstepped the legal mark.
ASIC should be allowed to oversee corporate operations, as was originally its remit back in the dim dark ages when financial advice had not been heard of, but should be removed from regulatory oversight of financial services. ASIC officers are too biassed against advisers and have too many conflicts of interests to be an impartial umpire.
The recent FFNS remediation program was one of the biggest ASIC frauds and political windups in Australian Financial Services history. Every adviser in the Country that was subject to the Audit (which was close to 80% of the Industry) knows all too well that the $billions of dollars refunded to clients were nothing more than ASIC deciding outside of the framework of Corps Law of what documentation constitutes whether a review was completed or not i.e. there is nothing in Corps Law or Licensee rules requiring the completion of an ROA for a ‘hold’ recommendation dating back to 2010, however ASIC deemed it a non-compliant file if a review did not contain a completed Record of Advice for a ‘hold’ recommendation, regardless of other supporting documentation, file notes, FNA, account reports and client authorities on file.
Nailed it. Not many industries where ASIC have stepped in and said this is how we define Customer Service and evidence of customer service is now a RoA saying sell BHP buy RIO tinto. Forget about what we actually do. ASIC are clueless of the value provided.
Went through it. Brutal, un reasonable and entirely un fair. The thing that angered me the most, was that the big licensee rolled over and took it from ASIC. look back should scare the shit out of the rest of corporate Australia!
I’m 110% convinced ASIC are 100% corrupt. They’re like the SS in Hitlers 1935 Germany and Advisers are the jews to be extinguished from the earth. At any point they could ruin your life and 30 years in business over a spelling mistake in a Fee Disclosure document or a SoA that missed the $200 boat.
I met a client and turned her away saying my ASIC levy has gone up,my fee cost too much and too much regulation….Told her to figure it out. Two years later she’s back crying and she one of thousands each year that lost the funds to scammers. It was a scam a first year Graduate could find the parties. After doing the scam watch thing, Contacted ASIC saying you’ve got the names of the Directors, they’ve said “what do you want us to do”… I almost hit the roof I said you guys drove up my costs and you’re the reason she’s been scammed, it’s your fault she’s lost her life savings and you’re saying “what do you want us to do about it”
I have sat in the office of an ASIC INVESTIGATOR – ever seen the movie Dumb & Dumber! Yep, I am pretty sure after that experience I know who the cowboys are!