‘False, misleading and derogatory’: ASIC responds to AIOFP allegations

In May, Association of Independently Owned Financial Professionals (AIOFP) executive director Peter Johnston alleged that Australian Securities and Investments Commission (ASIC) senior executive leader – superannuation and life insurance, Jane Eccleston, had made “erroneous” statements about advisers taking money from clients’ accounts.

Responding to a question on notice regarding the matter from Liberal senator Andrew Bragg during Senate estimates, ASIC said it “rejects the characterisation of statements made by Ms Eccleston at a roundtable to discuss the government’s financial advice reform”.

The regulator included a letter to Johnston from chief executive Greg Yanco, who at the time was executive director regulation and supervision, in which he labelled the allegations “false, misleading and derogatory”.

The rest of the letter, titled “statements you have made about ASIC and its staff”, is below:

ASIC does not accept your characterisation of Ms Eccleston’s statements. Ms Eccleston’s statements were clearly referring to a broader historical context being the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Royal Commission) in respect of misconduct by financial advisers (including instances of advisers having charged their clients ongoing fees for services that were not provided) and the subsequent legislative reform introduced to address this historical misconduct. Ms Eccleston’s statements could not reasonably be understood or properly characterised as an “attempt to smear the advice community in front of all other stakeholder”.

We note that your statements of concern have been re-published by the Independent Financial Adviser seemingly as a result of steps you have taken to circulate your statements to the media. ASIC considers it inappropriate for you to have taken this step when your statements are clearly false, misleading and derogatory.

We note that ASIC has previously raised its concern about statements you circulated to the AlOFP’s members attributing the suicide of a financial adviser to their failure to pass the financial adviser exam. Following our enquiries which verified that there was no evidence to substantiate your claim, ASIC raised with you its concern with the accuracy of your statements.

ASIC values its engagement with industry associations who play a key role in providing a voice for businesses within the industry.

However, in the circumstances outlined above we have reason to be concerned about the appropriateness of your engagement with ASIC officials and the accuracy of your reporting that engagement. Accordingly, ASIC intends that all future communications with you will be in the form of written correspondence only. I ask that you direct your written correspondence to me rather than other ASIC officials. I will ensure that your correspondence is directed to the appropriate ASIC official for consideration and response.

The letter was also sent to Financial Services Minister Stephen Jones.

ASIC also included the response that Johnston sent to Yanco’s letter, in which he stood by his understanding of the Eccleston’s comments and the issue of adviser suicides.

“In regard to the circa 30 suicides in our industry and the one specifically over the exam, we sought permission from the family at the time and they declined the opportunity to allow public scrutiny around the circumstances,” Johnston said.

“We will have to agree to disagree over what Ms Eccleston said, you were not there, I and many others were including the Minister.

“Any reference to ‘Advisers’ taking money out of consumers bank/super accounts without permission whether in the Royal Commission context or not is incorrect.”