The corporate regulator has called on financial advice firms to rise up to what he terms the “fairness challenge”, whereby it fulfils its core function to serve people and its obligation to act efficiently, honestly and fairly.
In his closing remarks at the ASIC Annual Forum in Sydney last week, ASIC chair James Shipton said everyone in finance must have the procedural discipline to ask, “Is this practice or product going to cause harm, be detrimental or have a negative consequence?”
“I am not convinced this level of questioning and procedural discipline has been applied by the financial industry when developing, and reviewing, business practices and financial products,” Mr Shipton said.
He added that financial systems not only need to be fairer – they must also be more inclusive.
“Ultimately, we need a financial system that not only serves every segment of the community but also is one where those who work in it feel proud of being a part of it,” Mr Shipton said.
“Proud because there is a broader community purpose to what they do and proud because they are professional in how they do it.”
Further, Mr Shipton said finance needs to find its noble and human roots and be a core part of the community, and not removed from it.
He said that if this can be achieved then we will have gone a long way for Australians to have trust and confidence in the financial system, highlighting comments by panellist Lynda Edwards, who said that something that is done that will have a negative outcome for customers is not fair.
“This is exactly the challenge, and discipline, that everyone in finance needs to address,” Mr Shipton said.
“They need the procedural discipline to ask, ‘is this practice or product going to cause harm, be detrimental or have a negative consequence?’.”
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