Speaking at a SPAA event in Sydney last week, ASIC senior executive leader, financial advisers, Joanna Bird said cuts to the regulator’s budget have meant ASIC needs to be selective about where to place its investigative resources.
“I would encourage you, where you see wrongdoing, to please report it to us,” Ms Bird said.
“I regulate a target-rich environment – we don’t struggle to find things – but the more information we have the better.
“[This information] can help us choose where we put our resources within that target-rich environment, by informing us about what is going on in the marketplace.”
Ms Bird acknowledged it can be “frustrating” for whistleblowers when the regulator seems slow to act on information, but she assured the audience of SMSF specialists that all tip-offs are treated seriously.
“Every piece of misconduct we receive is analysed, recorded and there for us to look at subsequently,” she said.
The lawyer and regulator also hit back at “reports in the media” suggesting administrative actions – such as licence conditions and banning orders – are an insufficient remedy to wrongdoing in financial services, arguing that “taking away someone’s livelihood” is a very serious regulatory action.
“Administrative actions are preferable [to other remedies such as criminal proceedings] because they have the ability to actually change the way a business is constructed and fix some of the problems,” she said.
At the same time, Ms Bird explained that the FOFA legislation has opened up new “civil penalties” that the regulator may take advantage of when scrutinising misconduct in financial advice, such as breaches of fiduciary duty.
The comments come as the government announces a new Office of the Whistleblower within ASIC and an ASIC-administered adviser register.
It would take a brave ASIC team to take on the Banks and they are not at ASIC because they are brave. Much safer not to rock the boat and pick up the pay cheque every month.
Paul – great idea, cc Adele and Michael but really we should not have to do that to get these highly paid public servants to act. I believe the only way forward is a Royal Commission into ASIC, clean the slate and start again with people who know and understand financial planning so breaches and fraud can be identified. Unfortunately ASIC is made up of failed solicitors who would not make it in the real world.
If they were race horses you wouldn’t feed them!
DAVE:
Here’s an idea – dob in (to ASIC) the accountant who is obviously breaching Corporations Law and CC Adele Ferguson and Michael West from Fairfax in the email. We all can’t afford to keeping banging on about ASIC in the same way that we get frustrated with commentators who don’t seem to understand that there have already been significant regulatory changes before FOFA. I’m absolutely no fan of ASIC and their actions, but they are all we have to protect us from the rogues (god help us!)
We and so many others agree with Ross Cardillo!
But how can the problem be put right? The passive shell be right mate does not work with these cronies! The fact that they are just so ineffectual is only a part of justice in freefall.
On one hand you have Jeff Morris who had the guts to stand for righteousness, as the CBA Whistleblower. And on the other hand ASIC representatives saying that the FOFA legislation has opened up new civil penalties that the regulator may take advantage of when scrutinising misconduct in financial advice, such as breaches of fiduciary duty. What a travesty of justice! It may be said by some a recipe to plan to fail
So ASIC is underfunded (so it is said) but the law is the law! Yes Ross ASIC needs a royal commission!
I believe that a major issue in the planning industry is ASIC and the fact that they are just so incompetent that they cannot do their job.
I cannot understand how Metcraft, Kell, Kirk still have jobs paying them over $400k pa.
ASIC needs a royal commission
How trite it is for Ms Bird to suggest ” it can be frustrating for whistleblowers when the regulator seems slow to act on information.
What an utter nonsense, there is overwhelming evidence of FOFA legislation violations coming from the Senate Inquiry alone. Jeff Morris has proven, in face of fierce personal pressures no doubt! There are massive issues related to misconduct! In compliance, financial advice leading to breaches of fiduciary duty aplenty!
ASIC was/is slow to act and took over a year to mount an investigation into Mr Morris’ allegations alone. It has routinely been described as a toothless tiger, a dog with no teeth!
For Ms Bird to even suggest Every piece of misconduct we receive is analysed, recorded and there for us to look at subsequently, With the past facts in mind, it is preposterous if transgressions exist! Deal with them NOW! Our time is soon
Dave as older more conservative accountants retire the figure will to 60% plus. Younger accountants are more inclined to become entrepreneurial accountants, with fingers in pies.
Seen a few in my times, but no-one seems to care, certainly not our wonderful regulator. Do the professional bodies still regard ethics in accountancy practice as a requirement
Met a client last week with net investment wealth of around $800k, $500k of which was invested in a listed micro cap stock (market cap approx $100m) and when I enquired as to what he knew about that company that i didnt, he told me “my accountant says its going to be huge and he knows some stuff that others dont”. I then looked up the shareholders interests on CommSec to find the accountant holds around 10% of the shares and is on the board, to which this guy had no idea… So this poor chap has over half his money in this tiny company, due to advice he wasn’t given by his not advice qualified accountant… I see similar things all the time with accountants rasing money of client A, B and C to provide capital funding for client D. The sort of stuff a decent adviser wouldn’t invest in with his enemy’s money… And ASIC want to check if I’m providing sound advice… Look at the accountants giving (informal) investment and strategy advice, which 50% do in my experience!
Do this at your own risk – especially if you are a co-director !!!!!! Remember ASIC is not your friend no matter what they say.
The way whistleblowers are treated should be made very public so ASIC know there are consequences if they dismiss or ignore information. I wonder what is the best way to this?
[quote name=”Wildcat”]Old Risky beat me to the punch on Storm, there were something like 8-9 reports on them before it all blew up. Before I would engage with them I would need to see some reassurance that the culture internally to ASIC has rotated from complete distrust and despising planners to actually identifying the professionals, engaging with them positively and seeking a better outcome for all.
I have to go now and make sure my last client got their FSG, FDS, disclosures, updated my registers for benefits and assets and there was something else I can’t remember…..hmmmm[/quote]
You have forgotten to charge your client less for doing all of this Wildcat!
With their budget slashed this is the best hope. If whistleblowers can also make public how they were treated ASIC will be forced to be more robust.
For once I agree with the bulk of comments so far and believe that ASIC has several problems to face up to:
It is seriously under-funded and MUST disclose that more openly (i.e. be the whistle-blowers they want us to be)
It has no direct lines of communication with advisers; they should be talking to us in every possible forum, to gain OUR trust if they want us to work with them rather than just avoid them.
If a “complaint” or “problem” is brought to their attention they MUST not just act, but be SEEN to act promptly.
I feel for what ASIC is trying to do and there’s no doubt our industry (the whole Financial Services industry – not just the advice end) needs some cleaning up. Those of us who’ve been around this game for three decades or more could reveal a whole bunch of things to them, but we’re NEVER listened to, let alone approached for advice by ASIC.
Old Risky beat me to the punch on Storm, there were something like 8-9 reports on them before it all blew up. Lucky though Storm were compliant, they had their detailed disclosures and FSG’s!!! Just no more money.
On one hand I feel credit to them for trying to help the vast bulk of professionals out there clean up the average. On the other, our budgets are cut so can you do our job, which we didn’t do well at all BTW, for us?
Before I would engage with them I would need to see some reassurance that the culture internally to ASIC has rotated from complete distrust and despising planners to actually identifying the professionals, engaging with them positively and seeking a better outcome for all.
I have to go now and make sure my last client got their FSG, FDS, disclosures, updated my registers for benefits and assets and there was something else I can’t remember…..hmmmm
This really takes the biscuit. The “seems slow to act” spin has an Alice in Wonderland quality to it in light of my experience as the CBA Whistleblower. The Senate Inquiry found that the problem with ASIC was more than just “seeming slow”, I think the words “timid” and “hesitant” were used. I would personally add the word “joke”. When ASIC was finished underplaying the hand I dealt them and bungling the CBA matter, I was dropped like a hot potato. Tip for would be whistleblowers: with the current crew at ASIC, be careful.
ASIC are focusing on the wrong advisers, its accountants they should be watching!
Excuse me – ASIC welcomes whistle blowers !!!. That’s news to every adviser
Advisers complained to ASIC re Storm for years before it blew up. Reportedly ASIC then stated Storm advice was “compliant “
In terms of risk advisers, they want us to identify to them who are the “churners ” without actually defining a lapse and a churn.
ASIC only has to ask insurers who are the churners ( Jordan Hawke has a list, so why can’t others ) and then ask other insurers which advisers are moving BULK business away from them.
Oh BTW ASIC, do you still need a complaint from a client before you will act to curtail the third line forcing that occurs on risk products when a bank takes on a new loan customer and automatically churns existing policies as it approves the loan facility.
Clients wont do that !!
ASIC needs to have a response process. I reported a scam a few years ago. (Bogus AFSL number etc). Never heard anything from ASIC. Saw the same company still operating months later.
Thought – WHY BOTHER – WASTE OF MY TIME.