Last week, ASIC released the findings of its review into how institutions have dealt with adviser non-compliance, highlighting the need for better reference-checking processes to prevent rogue advisers from circling the industry.
Speaking at the ASIC Annual Forum in Sydney yesterday, ASIC deputy chair Peter Kell said these issues cannot be fixed “at the flick of a switch”.
However, he wants to see quick results from the Australian Bankers’ Association’s recently announced Reference Checking and Information Sharing Protocol – which will help banks share information on poorly-behaved financial advisers.
“Otherwise there will be continuing pressure for more reviews,” Mr Kell said.
“We will start naming and shaming those institutions that we find to have failed when it comes to the provision or checking of references. If these things don’t work, it will be a big problem.”
The review stemmed from serious concerns about past adviser conduct, ASIC said last week, with the objective of lifting standards at major financial advice providers.
Other issues highlighted in the report include auditors failing to identify non-compliance and allowing rogue advisers to go undetected. Further, the regulator discovered significant delays between institutions first becoming aware of misconduct and reporting it to ASIC.
During the forum yesterday, Mr Kell added that the regulator was about to embark on more reviews within the life insurance industry.
“We’ve got major work underway in relation to the provision of life insurance advice. We’ve got a major focus on the direct sale of life insurance and we’re about to embark in a review there,” he said.
“We’re looking closely at some of the issues that arise in insurance that is provided through superannuation, and of course we’ve got a major focus on claims handling.
“These are issues we need to confront because I think we can see right around the world that the financial services sector and aspects are not working right across the community the way they are.”
Oh please ASIC will not go after the big institutions, when would they have a chance to ….before or after they have lunch with them????
great idea Jason.
On more than one occasion it has been suggested directly to Mr Kell and senior ASIC staff that a “simple” & inexpensive step in the right direction is under their very nose. When a licensee terminates an Authorised Representative, it is actioned via the ASIC portal that only registered licensees have access to. It would be a simple case of developing a drop down box where the licensee can indicate “reason for termination” and have 4 or 5 reasons such as voluntary resignation, involuntary resignation, retirement, death and “terminated by licensee”. This does not breach “privacy” concerns (and the ASIC Portal is not in the public domain), but it would place some onus on the recruiting licensee when searching the ASIC Register to ask the question of the adviser why they were terminated by the previous licensee. It may not be the panacea Mr Kell is looking for, but it would certainly be a step in the right direction and one that ASIC can easily implement.
Maybe a better approach is to tell senior staff in the banks to stop telling their planners that if they don’t sell more of product X by the March quarter end then they’ll be sacked. No Pressure Mr Planner with the mortgage and three kids, who just left a safe job to join the CBA.. I’m pretty sure you’d see a lot of planners “terminated by licence” or “”involuntary resignation” because of the failure to reach an insurance and or revenue target. A more simple solution would be to suspend the Banks license for 3 months and see how they go getting there act into gear then.