Earlier this month, the Australian Securities and Investments Commission (ASIC) released a consultation paper outlining plans to publish two dashboards containing reportable situations and internal dispute resolution (IDR) data in the second half of 2025.
This would see firm-level data go public, ASIC stated, including business names and their Australian Financial Services Licence (AFSL) numbers. However, the dashboard won’t include the names, licence numbers or submitted data of licensees who are individuals, the regulator clarified.
According to ASIC, the publication of the dashboards aims to boost transparency, drive improved performance and help deliver better consumer outcomes, but a professional has argued under-reporting could become the unintended consequence.
Speaking to ifa’s sister brand, Money Management, Assured Support managing director Sean Graham said AFSL holders may be deterred from reporting by the proposed public nature of the process.
“If participants think that the purpose of the public listing, for example, is to discipline or shame or embarrass – it might have that effect. Then they’re unlikely to do it. That’s just human nature,” Graham said.
“I think it will work counter to what [ASIC] are hoping to achieve, because what they are hoping to achieve is for licensees to report information and to let ASIC know.”
Graham explained what could end up happening is that the corporate regulator ends up with incomplete data.
“I think if they [AFSL holders] under-report it or downplay it, it will restrict the amount of information that goes through to ASIC that they can use to do effective surveillance,” he said.
“I actually think it’s the wrong way of doing things … Publishing names is not going to encourage them to come forward, there isn’t a prize at the end of the year. They’re not going to attract more clients.”
Instead, Graham suggested ASIC could follow the precedent set by the Financial Services and Credit Panel (FSCP) – ensuring that a balanced approach is struck, one that facilitates an appropriate level of transparency, while ensuring AFSL holders aren’t being relegated to the hot seat.
“They could do it in an anonymous fashion, for example, by almost the same way they do with the FSCP determination. So identify a bank B or bank C or AFSL X, amount of complaints, and talk about it almost as a cohort thing,” he said.
Graham opined that consumers are very unlikely to interpret the data in a constructive fashion, adding that naturally, larger firms will see a higher number of complaints.
“It could be problematic for big groups, because it doesn’t contextualise it by the number of advisers or number of clients. It’s just a raw number,” he said. “My position would be that they should be focusing on the speed to the resolution, the outcome, what percentage go to AFCA afterwards … Those are useful elements to be looking at.”
Graham also flagged the impact ASIC’s proposal could have on banks, if they return to financial advice.
Last December, a legal expert flagged similar concerns, highlighting growing tension in the industry.
“The industry is really concerned about how that reporting is going to take place, whether there’s going to be appropriate contextualisation around the actual reportable situation that’s detailed and the number [of breaches],” said Hall & Wilcox partner Selina Nutley at the time.
“You can imagine, if one of the larger licensees is shown to have reported thousands of breaches in a year, without context around what percentage of their operations that represents, then there’s potential for adverse implications.”
ASIC is currently seeking feedback on the proposals, with the submission deadline set for 14 May. The initial publication of the dashboards is anticipated between September and December this year.
