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ASIC tells advisers ‘don’t get too caught up in regulatory change’

Advisers need to ensure they don’t get too caught up in regulatory changes and forget about their current obligations, according to ASIC.

The flurry of regulatory changes that have been announced or are currently in progress doesn’t show any signs of abating, and the corporate regulator recognises that there are risks involved with advisers trying to stay on top of the shifting landscape.

Speaking at the SMSF Association National Conference in Brisbane on Wednesday, Leah Sciacca, senior executive leader – financial services and wealth group at the Australian Securities and Investments Commission (ASIC), noted the scale of changes happening within financial services.

“I think specifically for the advice industry, it’s not an external risk as much as there is a lot of change in the advice industry for financial advisers,” Ms Sciacca said.

“Professional standards, the adviser registration became a requirement just last week, and more are coming down the pipeline in terms of the government’s response to the Quality of Advice Review.”

She stressed, however, that while it is easy to focus on these external factors, advisers shouldn’t lose sight of their current obligations.

“Change is inevitable, but I think as well just focusing on existing obligations – your clients, record keeping, all of those basics – I think it’s a timely reminder that a lot happens perhaps externally, and just not losing sight of all those current obligations,” Ms Sciacca said.


Ms Sciacca also acknowledged that the corporate regulator would continue to focus on retirement outcomes as part of its four-year corporate priority plan, specifically on protecting consumers as they plan their retirement.

To achieve its priorities, she said ASIC will undertake a range of strategic and enforcement work, included in which is a review of SMSF advice.

“As we know, setting up an SMSF is a significant step and may have serious consequences for consumers, particularly their retirement savings and also insurance cover,” Ms Sciacca said.

“We think SMSFs are suitable for some but not all consumers, and financial advisers must use their professional judgement to consider the broad range of relevant factors to ensure SMSFs are established only when it is suitable for the unique objectives and circumstances of the individual.”

She explained that ASIC has previously undertaken SMSF advice thematic surveillance and it remains an area of interest, as does observing incidences of inappropriate SMSF advice in past reviews.

The corporate regulator announced earlier this week that financial advisers are also among a group of stakeholders it’s paying close attention to following a review into the role super trustees, advisers and their licensees play in influencing the investment options in member super portfolios.

ASIC said on Wednesday that the results of the review were concerning. Namely, it found that advisers were not always addressing underperformance where relevant.

Having reviewed 88 advice files across 26 advice licensees, focusing on advice provided about nine options that all persistently failed to meet performance expectations, the regulator said it is considering a “range of regulatory responses” where the results of the review were concerning.

Commenting on the findings, ASIC commissioner Simone Constant said: “Australians trust their super funds and financial advisers to ensure they’re getting the best possible returns on their super savings. We expect funds and advisers to ensure that trust is not misplaced,” Ms Constant said.

“Members should be informed about their super investments – not left in the dark if their super investments are not performing as expected, and there may be better alternatives.”