Individual licensing solves ASIC 'invisibility'
ASIC has said a move to an individual licensing regime would have benefits for the regulator, though stopped short of endorsing calls for an overhaul of the status quo.
Asked about questions raised by the parliamentary joint committee (PJC) on corporations and financial services regarding possible changes to the licensing regime, ASIC senior executive leader, Joanna Bird, said that while the regulator does not have an “organisational view” on the issue, there would be some welcome aspects of a policy change.
“One of the benefits in the past [system of individual licensing] was that we could actually see everyone and we had visibility of employed advisers,” Ms Bird told a SPAA NSW chapter meeting on Tuesday.
“Losing that has been frustrating because a very common experience is licensees breach report misconduct by advisers a long time after the misconduct happened, after they have fully researched it and possibly dismissed the individual.”
However, Ms Bird also made clear that the regulator sees this as “very much a matter for government” and that ASIC will “deal with the regime that is dished up”.
“Obviously an individual regime is much more costly to administer so the government would also need to decide whether it is willing to resource that. It certainly gives you more control but it is also more costly,” she added.
At the same time, the ASIC official and former law professor suggested the government’s adviser register may mitigate the need for a shift towards individual licensing, at least from the perspective of visibility to the regulator.
“The financial advisers’ register will overcome that, so one of the past benefits of individual licensing has actually been delivered in a much more cost-effective way through the adviser register,” she said.
The comments come as PJC chair Senator David Fawcett told ifa the committee is seeking industry views about any changes to the licensing system for advisers, sparking a number of thought-provoking comments from readers.
Senator Fawcett also talked up the perceived benefits of the government’s adviser register as well as private sector-led initiatives, telling ifa that as long as the information is accurate, “the more disclosure the better”.
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