Four CBA advisers under investigation

Appearing before the Senate Economics Legislation Committee in Canberra yesterday, senior ASIC officials were asked to provide an update on the total number of CBA-aligned financial advisers who have received banning orders or other punitive action.

“We’ve banned five advisers, had three EUs – three who have removed themselves from the industry – we have subsequently banned another adviser in relation to his conduct at a subsequent licensee, but he came to our attention because of misconduct in the CBA group so that came out of that and we are still looking at about four CBA advisers,” said ASIC commissioner Kathy Armour in response to a question from Senator John Williams.

Deputy chair Peter Kell interjected that there has therefore been a total of nine CBA advisers banned, with “more to come”.

Asked whether the FOFA reforms or other regulations are having a significant impact on the industry, Mr Kell replied that the advice sector is “on the up” in his view.

“[FOFA is] having an impact in terms of remuneration structures. It is also bringing to light some problematic past practices such as charging a fee for advice that wasn’t actually provided. We’ve got a lot of work underway in this space.”

Mr Kell reiterated that ASIC will provide guidance to the market about constructing and operating adequate remediation schemes, lamenting that some have “fallen over” in the past.

The questions followed an opening address by ASIC chair Greg Medcraft in which he indicated the corporate regulator will be focusing its enforcement activity more specifically on “bad culture”.