ASIC has to grapple with ‘very, very poor law’: Levy talks regulator's role in advice

Despite agreeing that the financial advice industry has been subject to "overregulation" in recent years, Michelle Levy has suggested that ASIC is not to blame.

Appearing on the latest episode of the ifa show ahead of the QAR's release in December, Ms Levy noted that the corporate watchdog "didn't write the law".

"I think ASIC has to grapple with, I think very, very poor law," Ms Levy said.

"If it wasn't obvious when it was rationed that it was poor, it has become obvious. The fact that people find it so hard to understand and so hard to apply is of itself evident that it's not working."

The Allens partner argued that while ASIC do have some relief powers, they are not significant and the most they can do is provide guidance on the law.

She added that the regulator is dealing with a "very poor regulatory regime".

"There's also misconduct. I don't think we can forget the regime we have is because of a lot of misconduct," she said.

"And so again, ASIC, of course, is responsible for looking after protecting the interest of consumers. And so it's a hard job. They're trying to help people who are advisers who are doing a good job, protect consumers against advisers who are doing a poor job and then constantly dealing with new models, the new products and new stuff all of the time.

"So I don't think we can blame ASIC for the difficulties the industry has."

On the same episode, Ms Levy hit back at criticism of her appointment as the QAR reviewer. Following the announcement in March, many backed the move, while others advocated that someone actively working in financial advice should be taking on the task.

However, Ms Levy said being a lawyer and working in the regulation of financial services makes her a suitable choice to assess how the regulatory framework could deliver better outcomes for consumers.

"I've lived and breathed this stuff, I suppose, since it's inception," Ms Levy said.

"The review is a review of the regulatory framework... and I think I have a really good understanding of the industry and what I hadn't known before, I've learned because I've had so many conversations with dozens and dozens of people."

The QAR is set for release on 16 December.

Listen to the full podcast with Ms Levy here.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.