Advisers must protect themselves against 'hungry' ASIC
Advisers have been urged to protect themselves against a more "powerful and hungry" ASIC as the corporate regulator ramps up scrutiny of the financial services industry.
In his opening address to the AIOFP's 2015 National Conference, executive director Peter Johnston told delegates that advisers must be prepared for a more aggressive corporate regulator who may be on the lookout for "soft targets".
"There is going to be a more powerful, hungry ASIC, with more invasive powers," Mr Johnston said. "They're going to have the power to do anything, so we're going to have to find ways to protect ourselves against that.
"Education and professional standards will be at the forefront, so there is no doubt we're going down that path," he said. "We have to be aware of that and prepare yourself and also your advisers for that."
Mr Johnston said the AIOFP's member protection fund, which launched late last year, was a key way in which advisers could protect themselves – although he admitted it did not have the full support of the regulator.
"Even though ASIC don't like it – bad luck," he said.
Not only are advisers going to have to face more scrutiny from ASIC, the battle against the institutions will continue.
"There is a more educated, discerning consumer and greater opposition from the institutions," Mr Johnston said.
"Many of them have gone against what they said they would be doing many years ago and are going directly to our clients ... and they're competing directly with us.
"So our members must make efforts to protect themselves," Mr Johnston said.
At the same time, the professional indemnity market remains a stumbling block, he said.
"There are higher minimum PI premiums in a selective market ... the PI market is very poor at the moment," Mr Johnston said.
"So there are very few underwriters left and it's going to be a real problem, going forward."
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