Longo, Court square off with O’Neill over ‘demonising’ advisers

Speaking on behalf of “ordinary Australians” at the Parliamentary hearing on the oversight of ASIC, the senator claimed too many advisers are “ripping off their fellow Australians”.

To an objective observer, her comments seemed to suggest professional, licensed advisers were at the centre of the loss of superannuation savings through schemes such as First Guardian and Shield.

When chair Joe Longo interjected, noting that most financial advisers “do the right thing”, O’Neill raised her voice, emphasising that “there’s enough there who are looking at a very lucrative business model by ripping off their fellow Australians”.

O’Neill elaborated on the trust Australians place in advisers: “There’s a lot of talk about financial advisers and they put a lot of effort into talking to all of us. And there is an assumption that they are professionals and that they will do the right thing.”

Longo, appearing visibly uncomfortable, urged O’Neill not to “demonise all advisers”.

She responded by reiterating her concerns, saying bluntly: “There is enough there to be concerning.”

The ASIC chair added that “there is a lot of blame to go around here” in an attempt to shift the conversation towards superannuation trustees, who, he said, were “hosting a number of managed investment schemes that are high risk products”.

However, Longo did not get far, interrupted by an impassioned O’Neill again, who insisted they “stick with the financial advisers”.

“My goal at the end of today is, with this august group of people who are here representing Australians is to have no doubt in the public place that if you fill in a form online, and you get a phone call from somebody, you do not move your superannuation,” she said.

Deputy chair Court too came to advisers’ defence, attempting to explain to O’Neill that “there are obviously a lot of good financial advisers out there”.

The message to Australians, she said, should be “if you’re thinking of moving your superannuation, get independent financial advice”.

“And that’s where this was different,” Court said of First Guardian and Shield, adding that “these advisers were all connected in the chain” - meaning they had a close relationship to the telemarketers and the funds they were promoting.

Court continued, attempting to explain to O’Neill that ASIC relies on the associations, such as the FAAA, to “refer the bad apples to us”.

“We need them out on the ground, because they see what has happened as a result of these issues,” she said.

Attempting to move on to the funds in question, Court like Longo was cut off by O’Neill, who steered the conversation back to advisers.

The scenes that played out at the hearing - including O’Neill’s repeated attempts to bring the conversation back to advisers - were interpreted by ifa to portray her determination to keep scrutiny squarely on the profession.

Her demonstrative behaviour almost overshadowed a number of important admissions made by Longo, who disclosed that ASIC is looking at funds beyond First Guardian and Shield and that the actual number of wronged Australians could be as high as 30,000.

Court also disclosed that the corporate regulator is “in the process of looking at” 140 advisers.

“Twenty of those have already had court action, 50 of them are current investigations, and 70 more we have on the list,” she said.

More to come.