The Coalition’s dissenting report on the performance of ASIC has argued against a Royal Commission into the Commonwealth Financial Planning scandal on the grounds it will “incur significant cost to taxpayers”.
The report, by committee member and Tasmanian Liberal senator David Bushby, is part of the Senate’s final report into the performance of ASIC in investigating a string of advice failures at CBA dealer group Commonwealth Financial Planning.
As part of the report’s 61 recommendations, the committee recommended a royal commission be held to inquire into the behaviour of financial planners at Commonweath Financial Planning as well as ASIC's handling of the matter
Mr Bushby that while “there is no doubt that there was a failure of governance when it came to the operations of certain advisers” at CBA, a royal commission into the scandal is unnecessary.
“A Royal Commission is primarily intended to undertake a fact-finding mission, however, the issues proposed to be examined here have already been extensively reviewed - including by ASIC, the CBA, the police and the committee,” Mr Bushby said.
“Although a Royal Commission might recommend improved practices, existing institutions have already been at work exploring and driving wide scale reform in the financial sector.”
Mr Bushby said that ASIC’s investigation into CFPL predates changes made under the FOFA reforms “which have imposed strong obligations on advisers to prioritise their client’s interests over their own and to act in their clients’ best interests”.
He also argued that ASIC’s intervention has “greatly transformed” the culture of CFPL and provided significant compensation to those affected by poor advice.
“Given these circumstances, and given that the law has changed and will possibly change again following the Financial System Inquiry (FSI), a Royal Commission or any other inquiry will incur significant cost to taxpayers without delivering any greater level of understanding or financial restitution,” Mr Bushby said.
“A fresh review of files and individual cases could protract the emotional strains on victims of malpractice over a longer time period, without the advantage of offering additional remedies beyond those that are already being worked through.”
Several firms have been impacted by the corporate regulator’s action.
Super funds must now have a retirement income strategy in place.
Vanguard has called for a complete overhaul of the advice industry.
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