ASIC will ‘accelerate and expand’ wealth crack-down
The Australian Securities and Investments Commission (ASIC) will accelerate and expand the Wealth Management Project which identified significant shortcomings within the major banks, leading to tough scrutiny at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The regulator has also signalled its intention to bring in outside experts to help it with the move.
ASIC’s intentions have been confirmed by the regulator’s new chairman, James Shipton who told a Sydney conference that much of what had been examined at the Royal Commission had been as a result of the Wealth Management Project.
“Much of what we saw in the financial advice round of the Royal Commission hearings was based on the work of our Wealth Management Project,” he said. “We intend to accelerate and expand this intense program. We are also looking at ways to build on our substantial enforcement outcomes.”
Shipton said this could include making greater use of external expertise in investigations and enforcement actions.
“This will help accelerate our response times and ensure ASIC continues to deliver strong enforcement results,” the ASIC chairman said.
Elsewhere in his address to the Australian Council of Superannuation Investors (ACSI), Shipton pointed to what he described as “systemic conflicts of interest,” stating that he was worried that “many financial services companies have become insular by focusing only how they can maximise earnings”.
He said conflicts of interest were a perennial challenge for business, especially in the financial sector, and it was clear that a number of institutions had not taken management of conflicts of interest to heart.
“This is verging on a systemic issue,” Shipton said. “Indeed, it is the source of much of the misconduct ASIC has been responding to and which is being highlighted by the Royal Commission.”
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
