Following ASIC’s post-royal commission pivot to a ‘why not litigate’ stance, Hamilton Blackstone Lawyers managing director Cristean Yazbeck said he had observed several instances of the regulator “conducting functions outside its powers or without proper process” to gain information that could lead to regulatory actions against advisers.
“The worst recent client experience was that of a responsible manager of a licensee, who was contacted by ASIC to come in for a ‘voluntary’ interview in relation to another licensee under investigation,” Mr Yazbeck said.
“[After] 18 months of no contact from ASIC post-interview, two statutory notices of intent [were served]: one to cancel my client’s AFSL, the other to ban my client from providing financial services.”
Mr Yazbeck said he was provided a copy of the interview transcript after the fact and noted the client was not informed of several key legal rights he had waived by attending the interview.
“At no time during the interview was my client informed, as was legally required, that being a voluntary interview and not one conducted pursuant to ASIC’s powers under section 19 of the ASIC Act, [he] was not protected in the event of a breach of confidentiality, and – most importantly – was not protected by the privilege against self-incrimination,” he said.
Mr Yazbeck said in his recent dealings with ASIC, there had also been a strong focus on publicly appearing to “look good” rather than taking action that was legitimately in the interest of consumers.
“ASIC is on record where they have asked licensees to ‘choose’ or ‘negotiate’ their outcome, but on the condition that the outcome is one on which ASIC can issue a media release,” he said.
“To give another example, one of my clients had already moved to voluntarily cancel its AFSL for separate commercial reasons, but ASIC since advised that it still wished to cancel the licence for alleged breaches, so the media release that it so desperately craves could be issued.”
Mr Yazbeck added that the regulator’s recent actions had demonstrated it was no longer interested in working with the advice industry, and instead wanted to “beat its chest” and “throw the book” at advisers, which could have poor consequences for consumers as more AFSLs were forced out of the industry for seemingly minor breaches.
100%
Beating its chest. They are playing with the mental health of an entire industry, they don’t care about consumers financial literacy, they don’t care about the wellbeing of the advice industry and it’s ability to serve the public. They only care about applying draconian legislation, lobbying for more draconian legislation and making the entire financial services sector unworkable. They should be absolutely ashamed of their conduct because they are facilitating the decline of a valuable industry to the community.
Sure they think they are doing the right thing – but they are too narrow focussed to understand the broader consequences of their actions. No wonder the cost to give advice to an individual is skyrocketing. Every adviser’s primary concern right now is not the best interests of the client but compliance with laws that are unworkable.
The banks are found guilty of multiple breaches and contraventions spanning many years, actively fighting ASIC every step of the way. When they finally reach the end of the line, ASIC allow them to help draft the press release and ‘negotiate’ a suitable penalty. If that doesn’t fit the definition of corruption, then I don’t know what does… In the meantime, ASIC come down like a ton of bricks on small-time advisers who have inadvertently made a mistake. Truly sickening. Our tax payer dollars hard at work.
Tax payer dollars or the fees we advisers pay to be policed?
Best Interests Duty of ASIC’s has nothing at all to do with the actual Best Interests of clients/consumers. SoAs, Opt-Ins, FDSes, RoAs, etc – none of these provide a client with anything of real value or certainty of outcomes. They tick the boxes of the gestapo-style regime that is installed in ASIC to help them ensure the continued employment of their public servants who have neither experience nor knowledge of their subject matter (ie Financial Planning/Services), and to ensure they can justify their constant calls for increased funding whether it be via the government or private sector. Their jobs are essentially to rape and pillage financial service providers, while confusing consumers.
obligations are enshrined in law. Asic don’make law. You maybe should take time to do a little reading.
I realise this – though ASIC are largely responsible for the laws as they currently stand as they were enshrined in law after being created in consultation with ASIC as the main source of input. Perhaps you should do a little more reading 😉
Got to meet those KPI’s so they can collect their bonuses now that their income is not tied to the public services act.
As the leak from ASIC said – “Heads on stakes” was the order from above.
(*SIGH*) I’ve said it a hundred times before and I’ll say it again – ASIC and their Minion Politicians DO NOT CARE about IFA’s or consumer outcomes, all they want are big banks and insurance companies in the playing field so they can issue multi-million dollar “infringement” notices or win court cases that grant millions of dollars in fines and penalties. All IFA’s should boycott the advice industry and be completely out when the “higher education” requirements become mandatory (2024?). As long as the Union backed Industry Super Funds are protected from all of this regulation, ASIC and the Government DO NOT CARE what happens to advisers, their clients or the broader community because they want us ALL OUT!
Yep good on ya ASIC – you let the banks get away with murdering the Adviser industry for the past 20 years.
Banks and ASIC get grilled at the RC and the resulting fallout:
1) Banks can’t run away fast enough from Advice Industry – that they have stuffed up.
2) ASIC wants to beat the crap out of remaining IFA’s to show how tough ASIC are, beating up the small guy.
3) Govt REGS up the wazoo in every which way, STRANGULATION by REGULATION of IFA’s.
Pathetic ASIC, absolutely pathetic.
If advisers are doing the right thing you never have to look over your shoulder.
Wrong! If ASIC come after you they will get you regardless of whether you’re doing anything wrong or not. Their job is to rid the industry of the crookes (of which there still are some) not punish IFA’s for SOA font size or whatever other reason they can make up.
And if ASIC don’t get you AFCA will, because all the client needs to say is “I didn’t understand the advice.”
You’ve clearly not been in the industry long OR never dealt with an AFCA complaint… It doesn’t matter your opinion you are INSTANTLY guilty until you can prove your innocence and when the complaint can be over something as simple as “I just didn’t understand” how do you really defend that.
What’s new – always whatever is easy and handed to ASIC rather than the hard work of investigating proactively.
That’s unusual for ASIC. Everything seems to be so transparent with their work after they moved to the new structure.
asic have no interest in being fair. they just want to make people look bad.