In a Senate inquiry on Tuesday (16 November), ASIC chair Joseph Longo conceded that the corporate regulator had received complaints about matters related to Sterling in late 2016, however it did not become officially involved until a referral by the Western Australia Department of Mines, Industry Regulation and Safety in March 2017.
The Sterling First Group eventually collapsed in 2019, leaving more than 100 customers facing possible eviction and heavy financial losses.
In his opening statement on Tuesday (16 November), Mr Longo said “we appreciate that those who have suffered losses have wished for us to move faster at times”, however he was pressed on the matter by senator Louise Pratt who asked if ASIC could identify opportunities where it could have acted earlier.
“At that point in time the documentation of the scheme met the statutory requirements for registration,” Mr Longo responded.
“It’s true we had two or three complaints or reports of misconduct in relation to Sterling [in] late 2016, early 2017… but those didn’t trigger any particular concern for us that required any further action.”
As well as the tenant investors, 465 others invested in the Sterling Income Trust alone.
Mr Longo’s comments come following fresh demands from the Association of Independently Owned Financial Professionals (AIOFP) and consumer groups, including CHOICE, for a key change to the government’s CSLR obligations bill – the inclusion of all managed investment schemes (MIS) and other bank products in the CSLR catchment zone.
AIOFP director Peter Johnston wrote in a letter to MPs: “Commissioner Hayne intentionally recommended a retrospective date for the commencement of CSLR to assist consumers who have lost life savings due to the incompetence of banks.
“The Commissioner also wanted all managed investment schemes and other bank products involved in the CSLR catchment zone to comprehensively protect consumer savings.
“Minister Hume however wants to defy Commissioner [Haynes’] recommendations by precluding banks and their MIS products from CSLR catchment and not backdating its commencement – an astonishingly conflicted position to take against consumer best interests.”
The Sterling Income Trust inquiry will continue on Thursday (18 November).
ASIC are too focused on banning Advisers for not sending statements to clients on time. Statements they don’t want and don’t add value in any way whatsoever.
This happened on Medcraft and Kell’s watch. Those two were so focused on destroying professional financial advice, they failed to do their real job of protecting consumers. Thankfully they have gone, but the adviser persecution culture they created lives on in ASIC.
Longo needs to cleanse ASIC of any employee who was ever within 3 reporting levels of Medcraft or Kell.
What is the bet the complaints were raised by financial planners, so ASIC ignored the product manufacturer and probably investigated the financial planners instead. Here we are 5 years later and not one client is better off. Considering how many clients have lost money to schemes like this while ASIC was apparently policing them, shouldn’t we be starting to seriously investigate the gross incompetence of ASIC and someone be made accountable? Lets look back 10 years, just like advisers had to.
I’m gobsmacked…
I had a property investor client come to me with the proposed contract from Sterling. within the first few pages of the agreement I read I advised my client that this looked really shonky and to run, not walk away from it…to be 100% sure, I forwarded the agreements to a lawyer colleague who instantly agreed with my assessment, and yet, the ‘experts’ working for our regulator saw nothing wrong with it?
To be fair to ASIC it was only a complicated product offering targeting older Australian’s and their major asset. Who would have thought it could go wrong. To be clear I’m being sarcastic.
It’s never our fault says ASIC, never, ever, never………& ………even though Financial Advisers weren’t involved at all, surely we can say it was them. That’s what we always do.
It’s always the Advisers fault, that’s ASIC only ever option.
Pathetic ASIC, so lost, so out of touch, so many excuses.
But dont worry, we will always get the Advisers to pay for the investigation and of course we will get the Advisers to pay back the investors via CSLR.
What a freaking sad joke are ASIC
Too busy making sure that no small, independent financial planning firms remain in existence within 5 years.