The Australian Securities and Investments Commission (ASIC) has announced it will be developing a regulatory guide directly related to the financial advice problems encountered by the Commonwealth Bank and other major players.
It said the guide would relate to the review and remediation programs conducted by Australian financial services licensees that provide financial advice.
The announcement noted that over the last few years ASIC had negotiated a number of major review and remediation programs by financial advice firms and referenced the consequences of those programs.
“These programs have been large scale exercises to review personal financial advice provided to retail clients and to compensate those clients where loss has been suffered as a result of non-compliant advice, fraud or other breaches of the law,” it said. “A number of other licensees have also identified instances of deficient advice and have initiated smaller, more targeted review and remediation programs in response.”
Commenting on the move to develop the regulatory guide, ASIC deputy chairman, Peter Kell said he believed licensees that provided personal advice to retail clients needed to have robust review and remediation programs in place.
“We want to ensure that if a financial advice licensee needs to provide remediation, they do so in a way that is fair, honest and efficient,” he said. “Consumers will have greater trust if they can be confident that any remediation program is consistent and transparent.”
The announcement said the new regulatory guide would build on ASIC’s recent experience overseeing review and remediation programs, as well as existing ASIC guidance on dispute resolution in Regulatory Guide 165 Licensing: Internal and external dispute resolution. (See also Regulatory Guide 139 Approval and oversight of external dispute resolution schemes).
It said that developing the regulatory guidance, ASIC would consult with stakeholders including consumer groups, external dispute resolution (ombudsman) schemes, compliance advisers and industry participants.
