With a slew of new reforms for the financial services sector due to come into effect in October, ASIC has told local operators to expect a period of transition.
ASIC chair Joe Longo emphasised the long-term importance and benefits of a stronger financial system, but acknowledged that the challenges of implementing the changes have been made more difficult as a result of COVID-19 and renewed lockdowns.
As a result, ASIC will follow a more even-handed approach and look to take into account the broader context and challenges arising from the current operating environment.
Enacted in response to the government’s Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the six reforms cover a broad spectrum of issues.
Generally, they promise to provide ASIC with greater visibility into the sector, allowing them to spot and resolve potential issues more proactively rather than waiting to respond to reports of consumer harm.
Specifically, the reforms will require AFS licensees to notify clients affected by any breaches of the law within a certain time frame. A new reference-checking regime is also being introduced to vet potential advisers.
ASIC said that these new standards will “address longstanding concerns about inconsistent, inadequate and delayed reporting of breaches by licensees”.
The reforms also include new obligations that require issuers of financial products to adopt a “consumer-centric” approach to designing and distributing those products and conform to new restrictions when it comes to how they “hawk” them.
Mr Longo was optimistic about the potential impact of each reform, asserting that the changes will help ensure fairer outcomes for consumers.
“The benefits will increase over time as consumer outcomes become the focus and experience accrues,” he predicted.
For now, though, these long-term expectations are tempered by the realities of the present.
“We want to ensure the reforms are successfully implemented – and that means we will continue to work with industry, and build on the efforts by industry associations and individual licensees in preparing for these reforms,” he said.
Just like when they worked with Dover? or when they retrospectively applied todays rules for a 10+ year lookback on fees for no service? Yes, no doubt ASIC are really trustworthy.
This is all becoming pretty comical. So it seems that ASIC really believe that following their reference checking protocol (and all of the documentation we will now need to keep) will fix issues in the financial advice sector. Seriously, you couldn’t make this rubbish up.
Wonder if they followed their own protocol when they employ their own staff.
The quicker they bring in self-licencing the better.
I heard of a case recently of exactly this – ASIC working with Industry participants. Specifically, they worked to ban an Adviser of several decades who’d had not a single complaint made against him; whose clients had not made any losses and had all been much better off for the advice they’d received; and who had sent out FDSes and Opt-Ins a few weeks late due to a divorce he was going through at the time, though had discussed with his Dealer Group who’d told him it was fine. Poor chap is out of a career now and his clients without an Adviser or anyone to continue the good work he’d done for them over the years. But ASIC worked on it!
Nearly spilt my double strength, half milk-half soy, mocha decaf latte reading the headline!