ASIC to visit top six planning institutions
The six largest financial planning institutions can expect a visit from the Australian Securities and Investments Commissions (ASIC) which stated it would "test how they comply with high-risk areas of the law".
ASIC also stated it would examine high risk entities in the managed investment schemes area and gather local data on hedge funds "to identify risks relating to gatekeeper conduct in this sector".
The regulator announced the moves as part of its Strategic Outlook for 2014-15 in which ASIC set out the key risks it has identified in the markets it regulates and how the regulator will respond in the coming year to issues raised or discovered in those sectors.
ASIC released a 14 page document outlining the specifics of the Outlook and stated "we remain concerned about the culture of financial services businesses, and the incentive structures they use" and that financial services providers needed to have policies, processes and procedures to fulfil their legal obligations.
The regulator also stated that inadequate compliance cultures in financial services were creating a negative effect on end users and ongoing structural change — including the
Increasing level of assets held in self-managed superannuation funds (SMSF), were magnifying this risk.
As a result ASIC would also engage in further surveillance of the SMSF sector focusing on the promotion and sale of inappropriate products, unlicensed advisers and misleading advertising.
ASIC chair Greg Medcraft said where the regulator identified non-compliance "we will act quickly and decisively through our detect, understand and respond approach".
"ASIC is a law enforcement agency and we will take action against entities, regardless of their size or reputation," he said.
AUTHOR
Jason Spits
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