FAAA wants misconduct reporting hotline to ASIC

Mike Taylor

Managing Editor and Publisher

24 August 2023

Financial advisers should be able to access a priority reporting line to the Australian Securities and Investments Commission (ASIC) to report misconduct issues including unlicensed advice, according to the Financial Advice Association of Australia (FAAA).

The FAAA already has a memorandum of understanding with the Tax Practitioners Board (TPB) and chief executive, Sarah Abood, has told the Senate Economics References Committee she believes a similar arrangement could be established with ASIC.

Giving evidence to the committee relating to ASIC’s regulatory performance, Abood revealed the frequency with which the FAAA and its members reported instances of misconduct to ASIC but lamented the relative lack of feedback it received from the regulator.

She said that there were currently 11 cases which the FAAA had reported to ASIC which advisers regarded as “sufficiently grave” but did not know what, if anything, the reglator was doing about those reports.

Abood said that the only response the FAAA had received from ASIC had been a request for more information.

Asked by NSW Liberal Senator, Andrew Bragg whether the FAAA and its members could do more to assist ASIC, Abood said: “We absolutely think we could work more and help ASIC – a priority reporting line for professionals and professional bodies or an information sharing mechanism would help us work better together.

Abood told the committee that there was an opportunity for ASIC to better leverage intelligence from the financial adviser population.

“Advisers are considered trusted professionals and they are well placed to stop problems early,” she said.

“However, ASIC us to pass on information only to find no further information is sought from ASIC and it is disheartening for those involved.”

Abood said that the most common areas referred to ASIC had been with respect to unlicensed advice sometimes involving people who had previously been banned as advisers as well as social media influencers.

Asked how many people were guilty of such conduct, Abood said she could not be specific but that the number would be very large.

“When we are alerted by our members we want to shut it down as quickly as possible.”