Speaking at the SMSF Association conference in Melbourne yesterday, Senator David Fawcett endorsed the FSI recommendation to introduce product intervention powers for ASIC.
He said additional powers for ASIC over manufacturers would allow the regulator to adopt a proactive – rather than reactive – strategy and broaden focus beyond gatekeepers and intermediaries.
“We’re concerned about the individual adviser but we’re also concerned about the product they’re dealing with, how suitable it is, we’re also concerned about the culture of the companies they work with and we’re concerned about the regulator,” Senator Fawcett said.
“We look at things like the potential product intervention as one of those additional defences.”
The South Australian senator also suggested the regulation of financial services could take a page out of the aviation industry’s book.
A more proactive ASIC is unlikely to resemble the “Therapeutic Goods Administration where every product gets [a] stamp of approval,” but would rather be akin to the aviation industry where “everyone gets on an aircraft and they don’t expect it to be the fastest or [perform] aerobatics but they do expect to get there safely every time”, he said.
“Whereas for someone who wants more extreme performance or wants to fly in the experimental category, the degree of disclosure around the risk associated with that [will be] mandated by the regulator.”
Jeff Morris is spot on. ASIC has no such people-just lawyers with an ideological attachment to the ISA funds
ASIC is supposed to check PDSs. Yet Aust Super issued an insurance PDS on 1 July 14 which clearly stated Own Occupation TPD was available to its members despite the 1 July 14 SIS changes.
Aust Super finally corrected this error with a PDS on 1 Nov 14
Clients with D & TPD cover in Aust Super but with Own Occ TPD cover out of super were mislead by the 1 July PDS, , tempted by the usual reference to “cheaper premiums “. Thankfully in one case they rang first before they acted.
The ISA funds have a General Advice Exemption, courtesy of Bill Shorten & ASIC. In my view, that 1 July 14 PDS was so bad it actually constituted Personal Advice
All very true.
Unfortunately, a more pro-active ASIC would have asked for these powers a long time ago.
So you might need some more pro-active people at ASIC to go with the more pro-active powers.