According to the chair of the corporate regulator, risk-taking and encouraging innovation are an “essential part of Australia’s financial system and economy”.
“ASIC is [not] here to eliminate risk,” Joe Longo said at the AFR Super and Wealth Summit on Monday (22 November).
“But where industry has neglected to take its share of responsibility, ASIC will not hesitate to deploy the powers in our regulatory toolkit – to deter misconduct that causes harm, hold to account individuals and corporations that treat their responsibilities as optional, and drive a culture of better corporate behaviour.”
He explained that the corporate regulator needs to balance two key aims – supporting legitimate business activity while enabling an independent discharge of its own key regulatory and enforcement responsibilities.
“These outcomes are not mutually exclusive. By enforcing the law against those who break the rules, we support those who want to do the right thing,” Mr Longo continued.
“We now have a range of recently legislated powers available to augment our regulatory toolkit. These include new and increased civil and criminal penalties for misconduct and powers of intervention to prevent unsafe financial products being distributed.
“This means we can take considered and proportionate action where we find harm or wrongdoing.”
Super members deserve better
Speaking specifically about the super industry, Mr Longo acknowledged the increasing participation of trustees in the market, with many large superannuation funds moving investment management functions in-house.
As trustees insource more in terms of market participation, Mr Longo said, they need to ensure they have robust risk management, compliance and governance arrangements specifically focused on their obligations as market participants.
“ASIC recently examined switching of investment settings by directors and senior executives, highlighting widespread poor conflict-management arrangements. This is very concerning, given the level of sophistication and governance required of trustees when managing billions of dollars in assets on behalf of fund members,” Mr Longo said.
“They deserve better.
“Superannuation members need to be confident that those entrusted to act on their behalf do. And that confidence is justified.”
I can understand the frustration with ASIC to some extent, but I think it is more a cultural change that is the cause.
My company’s experience with ASIC in respect of a rogue Authorised Rep. ( only 6 weeks) was 1 of consummate professionalism and respect from their officers.
ASIC just talks a lot and takes no actions that could make a meaningful difference to most clients like reducing red tape in turn reducing their advice costs…
Where is that red tape reduction unit you spoke of Joe? Just more words without actions…
The issue is their actions and their words don’t align.
He said “ASIC will not hesitate to deploy the powers in our regulatory toolkit – to deter misconduct that causes harm, hold to account individuals and corporations that treat their responsibilities as optional, and drive a culture of better corporate behaviour.”
Just today we saw an adviser banned for illegally allowing clients to take money from super. And yet MLC as the licensee has not been given any penalty.
ASIC seem to talk a lot about what is above their pay grade or what isn’t their job. Given that their priority seems to be running advisers out of business, other than this, what is their job in respect to the protection of clients?
What rubbish from ASIC. It’s just fine for them rabbit on about climate change, pass judgement on advisors’ work based on hindsight, parade around about fees for no service fantasy etc. However, acting in a timely manner to investigate rogues such as Storm Financial, Melissa Caddick, Sterling’s suspect offering etc. – no way that’s not for them.
The question is ” what is it you actually do?”
Where is your value?
I know ASIC have now announced they will be monitoring adviser fees for “fairness and value” .
So ASIC is the pricing monitor of financial advice.
Talking about fairness and value – ASIC fees are a rort, If they want to expand their pricing activities how about legal fees, fees charged by medical specialists, accountants etc
ASIC should be defunded and society will be better off.