ASIC disheartens advisers by not cleaning out bad apples
Financial adviser “bad apples” are continuing to operate in the financial planning profession and it is disheartening for legitimate financial advisers, a Parliamentary Committee has been told.
What is more, the chair of the Senate Economics References Committee, NSW Liberal Senator, Andrew Bragg, has rounded up the first day of hearings into Australian Securities and Investments Commission (ASIC) investigation and enforcement to declare that the regular is falling well short of the mark.
A woman who works closely with financial advisers around regulatory compliance, Australian Independent Compliance Solutions managing director, Cheyenne Walker, told the committee of an instance where ASIC had declined to act against an unlicensed adviser who was continuing to contact clients because he was regarded as having retired.
She said the person involved had had sold his book to one of her clients but had continued to contact those clients with respect to their investment portfolios.
Walker said the issue was referred to ASIC on multiple occasions but, ultimately, the regulator had told her that it was not in the public interest to prosecute because the adviser was now retired.
She said this was even though ASIC had been told there was evidence of the man holding himself out as being an adviser.
Asked by Senator Bragg how she believed ASIC should have acted, Walker said she believed the regulator should have acted sooner and banned the adviser.
Walker said that ASIC’s approach had a negative impact on the industry, generating emotional trauma and a lack of confidence in the regulator trying to clean the industry up.
“Advisers are very committed to the industry and being professional and having a few bad apples hanging around the profession is disheartening, really,” Walker said.
Discussing his committee’s first day of hearings, Bragg said the takeaway was “that although we have strong corporate laws, the corporate regulator is defective”.
“ASIC has an obligation to investigate and prosecute white-collar criminals, but even when there are clear statutory breaches ASIC fails to act,” he said.
Is anyone actually surprised by this? Honest question.
Nope, nothing surprising here
You have to wonder about the political game here. Bragg is a liberal senator and there does not appear to be a labor senator on the committee prepared to dish the dirt. For example there is no senator Deb O’Neill chasing the big 4 consultants up every dry gully. It must be obvious to the labor Cabinet that something has to be done about ASIC at numerous levels, but perhaps Labor do not wish to be seen to be responding to a liberal agenda, particularly if they sense that Bragg may not have the support of his more Conservative opposition colleagues when it comes to a vote in the Senate.
The political game is that ASIC routinely ignores unlicensed “advisers”, accountants, and union super funds. They are primarily focused on persecuting honest professional advisers, as revenge for the behaviour of a few bad apples long gone. Labor is quite happy with that arrangement while it gives regulatory immunity to union super funds.
100%
ASIC seem to have their own hidden agenda.
Kill Real Advisers for minor breaches of over cooked ASIC Reg interpretations.
Yet the likes of Storm, Dixon’s, big bank FFNS, etc they had so many warnings and reports and many years to act in each case, yet do nothing until after the train wreck.
What they did to Dover and their advisers was disgusting. It hurt clients & advisers – just to make a point. They go after the wrong people. They had no understanding about how clients and advisers interact and what we do every day.
They seem to pick out someone or some institution or licensee they don’t like (or that question them!) and then find a way to go after them
ASIC is only interested in the easy wins. They will avoid the industry funds, unions and property sector.
Much easier to go after those who have no power and financial resources to defend their assault.
Before cleaning up you need to make sure your own home is clean They are far from it
It was said….the takeaway was “that although we have strong corporate laws, the corporate regulator is defective”. I would add and “corrupt”.
ASIC remains asleep at the wheel while continuing to pick up their fat taxpayer funded salaries. Don’t poke the bear!
There is no such thing as an unlicensed financial adviser. You are either a licensed financial planner or acting fraudulently. In this case ASIC has condoned the actions of a conman. This is at best incompetent but realistically moves beyond that to the point of deliberate inaction to allow consumers to be ripped off.