Advice features heavily in ASIC corporate plan

ASIC said in its Corporate Plan 2019-23 that it will support measures to improve the professionalism of financial advisers and target the potential misconduct and harms to consumers that may arise from the industry’s shift towards ‘general advice’ models.

It also said it is closely monitoring the potential harms that may result from larger institutions’ departure from the sector.

Changing adviser behaviours

New projects cited by ASIC covering 2019-20 relating to changing the behaviours of financial advisers included:

• Ending grandfathered commissions;
• Examining the effectiveness of measures to improve quality of advice;
• Protecting consumers of general advice;
• Examining unmet advice needs; and
• Review of training of financial product advisers.

ASIC also mentioned ongoing projects that cover 2019-20, including:

• The review of life risk insurance commissions;
• Approving and monitoring compliance scheme approvals;
• Enhancing the Financial Advisers Register;
• Analysing reward/incentive practices on advisers; and
• Developing a series of SMSF ‘red flags’.

Acting against adviser misconduct

Continuing projects from ASIC addressing adviser misconduct included:

• Banning advisers who have been identified as having serious compliance concerns;
• Surveillance of fee disclosure statements and opt-in requirements;
• Monitoring fee-for-no-service remediation; and
• Monitoring review and remediation programs for customers of large financial institutions who received inappropriate advice.

“The public expects financial firms to treat Australians fairly and live up to the expectations of the community and the law,” said ASIC chair James Shipton.

“The public expects ASIC to see that they do. If the firms or individuals we regulate do not, we have the will, the resources and the regulatory tools to hold them to account.”

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].