ASIC should cut senior executives and boost investigators
The Australian Securities and Investments Commission (ASIC) should cut down its senior executive ranks and employ more highly trained investigators enabling it to prosecute regularly and not be afraid to take on large institutional players.
A senior academic has told a Parliamentary committee that ASIC has not yet delivered on some of the key recommendations of the Royal Commission into Misconduct in the Banking, Financial Services and Superannuation sectors.
University of Technology Sydney senior lecturer, Dr Eugene Schofield-Georgeson has filed a formal submission with the Senate Economics Committee inquiry into ASIC investigation and enforcement that deterrence will work more effectively than compliance.
His submission is based on research conducted in the wake of the Royal Commission around ASIC’s use of its coercive powers and concluded that the regulator has some of the most extensive powers available but does not adequately use them.
ASIC should “prosecute more regularly and prosecute larger institutional players,” his submission said. “Deterrence, not compliance, as the Banking Royal Commission found, must be practised far more often.”
“Arguably, deterrence ought to be substituted for compliance,” Schofield-Georgeson said.
His submission said that ASIC should focus on core activities involving corporate investigation, rather than regulating multiple or niche aspects of company law and suggested that “non-core aspects of ASIC’s remit should be siphoned-off to other smaller regulatory institutions”.
Schofield-Georgeson said that the regulator should have funding maintained at current levels, but with a focus on keeping work in-house, rather than outsourcing to large legal and consulting firms.
He then suggested that ASIC “downsize the management team and bolster the ranks of its investigation team and nsure that experienced investigators train and mentor junior investigators whilst implementing staff retention policies for experienced investigators.
Schofield-Georgeson also recommended that ASIC implement an open diary policy for ASIC Chairs, ensuring that social and lunch engagements between ASIC Chairs and senior business leaders are transparently documented.
“To be clear, the most important of these actions involves retention of experienced investigators and the training of junior investigators,” he said.
The sackings of senior executives would improve the place.
However, you try calling ASIC and seeking assistance with the processing of a matter i.e. company re-instatement.
This takes months, no one can answer what exactly is required if the company isn’t an ASX listed entity.
Useless and frustrating.
ASIC should re-open the case and properly investigate the financial planner they crucified (lost their houses, savings and nearly lost his family and suffered significant distress through this experience until now) for alleged churning of insurance products. Through some bogus complaint (manipulated information) regarding this financial planner, they alleged the financial planner churned insurance products and put his clients into an inferior product and claimed commissions from it (His superiors received the commissions as per evidence, not him). Turns out, this financial planner had no choice to represent himself at the AAT (no funds to hire a lawyer or barrister, spent $400k), Evidence shows new life insurance products had more features and benefits and monthly premiums was significantly lower. Materials was severely manipulated to make it look like this financial planner was a crook. This financial planner had no compliance breaches, 100 plus good character references from the community and industry & had all the awards, 3 independent experts was hired to investigate the matter and turns out there was no formal / verbal warning of any breaches and other financial planners were doing it and still practising. When the truth started to surface, executives and including ASIC delegate who ruined this financial planner’s life, retired/resigned and employed somewhere else. ASIC has ruined this person’s life including his family (I am sure ASIC staff have families themselves) by not investigating this matter thoroughly & properly, they simply relied on materials provided to them. Lastly, they alleged 49 client files was churned, however, when this financial planner, decided to represent himself and asked for the 49 client files so he can thoroughly investigate, he has only received 20 client files, until now remaining 29 files have not been presented. Information on the judgement states, “retraining & monitoring this financial planner was a better option considering the truth was revealed”. ASIC need to take accountability for their significant errors and apologise.
The regulation of SMSF Auditors should revert to the ATO. They are the regulator of SMSFs but need to refer auditor misconduct to ASIC. Very bureaucratic and, this line of responsibility would be in the “niche” category mentioned in the article.
They should also remove the old guard who obviously have great resentment towards Financial Advisers and a Napoleon like complex, hungry with their own powers. One poor chap of 20+ years in the industry and who mentored many a junior Adviser into oustanding professionals of today was canned by a self-righteous ASIC delegate who blatantly ignored most of the supporting evidence to counter ASIC’s claims against the chap and in the end they banned him for a couple years – which is effectively for life – all over what boiled down to sending an opt-in and a FDS together to save clients confusion. His dealer group even approved the process and format in writing. Had statements from every client ASIC tried to use against him, supporting him and saying they had no complaints at all. Six figures and several years later trying to defend the matter, he lost his licence and career. It’s those sort of chaps the industry needs to bring through the next generation and ensure they do the best by the clients so as not to have a repeat of the banking financial advice scandals. ASIC ought to be ashamed. The delegate ougt to also especially pocketing his $400k salary.
Meanwhile we have academics bleating on about ASIC not using their powers. The real problem is that ASIC abuses their considerable power to persecute honest, professional advisers who are easy targets. ASIC fails to properly use their power to go after after those that cause real harm to consumers.