ASIC campaign makes waves

FPA/investments-commission/australian-securities-and-investments-commission/chief-executive/director/

23 July 2009
| By Liam Egan |

The Australian Securities and Investments Commission’s (ASIC’s) proposed investor education campaign, ‘Swimming between the Flags’, is set to receive a mixed reception from planners.

The campaign, tentatively scheduled for launch later this year, classifies some financial products as ‘within the flags’, and therefore safer for consumers.

Bank deposits, superannuation, blue chip shares, ‘vanilla’ managed funds and products with low risks or independent professional advice are deemed ‘within the flags’.

Financial Planning Association (FPA) chief executive Jo-Anne Bloch said the campaign had “some merit” because ASIC has placed financial advice between the flags.

“By doing so the regulator is effectively acknowledging the role of planners and acknowledging it as a valuable activity, which is to be welcomed.”

Bloch said the “only real concern” the FPA would have with the campaign is with the criteria ASIC uses to decide which products are between the flags and which are not.

Capricorn Investment Partners director Ray Griffin described the campaign as “counter productive to the ongoing efforts of planners to educate clients on the long-term benefits of growth assets, despite the carnage of the last two years”.

Flagging designated investment products and sectors in a public campaign would “not necessarily quarantine consumers from losses”, he said.

“I can easily mount a counter argument that being invested all your life in bank term deposits — which get a between the flags rating from ASIC — can be extraordinarily risky.”

Shadforth Financial Group principal, private client adviser, David Haintz said the campaign was “correct in principle” but felt that “consumers who take advice should have no need for it”.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

3 weeks 6 days ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 5 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 4 days ago

TOP PERFORMING FUNDS