ASIC chairman urges action on planning
The chairman of the Australian Securities and Investments Commission (ASIC), Greg Medcraft has openly urged federal parliamentarians to make changes which would lift the quality of financial advice in Australia.
Medcraft used his opening statement to the Senate Economics to again defend ASIC's track record with respect to its regulation of the financial planning industry but acknowledged that the regulator had been largely unaware of events within National Australia Bank (NAB) until media reports last weekend.
He then went on to suggest that it was "now time for action for those who can make a change".
Medcraft sought to defend ASIC's performance by stating that the regulator had been "demonstrating that there are problems with the quality of advice in the financial advice sector for some time".
"The proof has arisen from our proactive and reactive surveillance work, reports of misconduct, and market intelligence," he said. "These concerns have been strongly reinforced by the results of our shadow shopping surveillances. These date back to 1998, 2003, 2006 and 2011."
"Our recent proactive surveillance on life insurance advice found that 37 per cent of the advice reviewed did not comply with the legal requirements. And, our 2012 shadow show shop found that 39 per cent of the advice provided was poor."
"Lifting standards in the financial advice sector has been, and is being, comprehensively considered," Medcraft said. "We are firmly on the record in saying that standards in the industry need to be significantly lifted if community and regulator trust is to be restored."
"Now is the time for action by those who can make a change," the ASIC chairman said.
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