ASIC under-staffing puts onus on consumer

Speaking at a press conference on Friday held in the wake of a damning Senate committee report into the performance of ASIC, Mr Medcraft said Commonwealth Financial Planning is not the only dealer group he is concerned about.

“This is not about one firm. ASIC has pointed again and again to the fact that there are problems across this industry,” he said.

“We've been taking action against a wide range of firms and we will continue to do so because the industry as a whole needs to lift its game – that's very clear from this inquiry,” said Mr Medcraft.

ASIC considers financial advice a “high-risk sector”, but to put things in perspective, the regulator only has “30 staff looking to monitor over 40,000 financial advisers”, he said.

“We need consumers to take care when they're dealing with a financial adviser. And secondly, we need those that are licensees to make sure that they supervise the financial advisers that come under them,”

It is “clear” that there is a lack of trust and confidence in the system, he added.

“The financial advice industry itself has got to win the trust and confidence of Australians. The fact that only one in five Australians goes to a financial advisers is a testament in itself,” said Mr Medcraft.

The chief regulator also talked tough when it came to the big institutions.

"At the end of the day, frankly, I’m not reluctant to take any of them on. And I have," he said.

"We’ve taken on the CBA and sued them for hundreds of millions. We’ve taken on Macquarie Bank and sued them for hundreds of millions. Bank of Queensland is something that I continue to pursue."

Mr Medcraft said he has made it very clear to the key players in the industry that ASIC has accumulated "substantial reserves" to take on "any big institution".

"That is why, in fact, the government gives us that enforcement special account, so that if we want to pursue any major litigation, nobody is too big," Mr Medcraft said.