ASIC challenged on its approach to wholesale advice licensees
The Australian Securities and Investments Commission (ASIC) has declared it will direct its focus towards financial planning licensees who service wholesale clients if it detects emerging threats and harms.
Confronted by Parliamentary questioning about its relatively small amount of expenditure in 2021-22 related to advice to wholesale clients, ASIC said it would reassess its priorities if it proved necessary.
Its response followed a question from Queensland Liberal Senator, Susan McDonald who pointed out that ASIC had confirmed it spent just $35,000 in the 2021/22 year on the oversight of Licensees that provide personal advice to wholesale only clients, and that each of the 1,742 licensees in this space were required to pay an ASIC Funding Levy of just $20 each per year.
She said this contrasted “with what would appear to be over $50 million spent on financial advisers who provide personal advice to retail clients.
“Financial advisers who provide personal advice to wholesale only clients do not need to pass an exam or undertake further study and are not bound by the Best Interests Duty or the Financial Adviser Code of Ethics. With so many financial advisers leaving the advice profession, and potentially a number going into this wholesale only space, where such different standards applying, does ASIC have concerns about the risks in this wholesale only client space and the lack of oversight of conduct in this area?” McDonald asked.
ASIC responded that the ASIC industry funding levy that applied to the ‘Licensees that provide personal advice to only wholesale clients’ sub-sector for the 2021-22 financial year represented “ASIC’s regulatory effort for that sub-sector for that year”.
“ASIC continues to monitor threats and harms, including emerging threats and harms, across various sectors throughout each year, adapting to any changes and reassessing our priorities if required,” the ASIC response said.
“If ASIC identifies increased rates of misconduct towards wholesale clients, we will reassess our priorities and the focus of our regulatory efforts accordingly.”
A good lesson in evasive question answering. ASIC is more political than the politicians. Why were complaints from wholesale clients an issue for AFCA, even if it might have been outside their scope, yet it was of no interest to ASIC?
of the 1,742 licensees in this space were required to pay an ASIC Funding Levy of just $20 each per year
Did I read that right? That many?
It’s a loophole many are exploiting. Just to avoid the ASIC tax is reason enough.
Retail Advisers get hit with:
Wholesale Adviser get hit with:
Industry Super QAR Sales Call Centres get hit with:
Finfluencers & Illegal Advisers
Thanks for the level Advice field ASIC & Government.
I am a Retail Financial Adviser & I advise myself that I am a MORON !!!!!!!!!!!!!!!!!!!!!!
How are Retail Advisers totally persecuted by ASIC & Government, whilst the rest have next to zero regulation?????
This clearly shows that ASIC as a regulatory body is a Farce, and simply a tool of the Industry Funds, labour Government , and unionised funds to exert control over al Australians Super and Retirement funds with NO Regulation. QAR has just enlisted all of these unregulated, uneducated factions(Industry Super, Wholesale Funds, and Finfluencers) to take complete and Monopolised control of Australians $4trillion dollars in retirement funds. ASIC and the Government are asleep at the wheel, or knowingly corrupted.
It is clear to anyone with half a brain that the wholesale advice segment is going to cause heartache. Yet ASIC wait for the heartache to occur.
It is also unfair of Stephen Jones to exclude wholesale advisers from the ASIC levy.