New ASIC boss warns 'gatekeepers'

Financial services providers need to regard themselves as ‘gatekeepers’ and take more responsibility for the products which reach retail clients as well as any compensation issues which may follow, according to the new chairman of the Australian Securities and Investments Commission (ASIC), Greg Medcraft (pictured).

In an address to the Financial Ombudsman Service delivered last week, Medcraft described financial service providers as being “literally gatekeepers, in that products would not reach retail clients without their support”.

He then went on to discuss the Government’s Future of Financial Advice (FOFA) reforms and the provision of adequate compensation for retail investors and consumers and, specifically, the implementation of a statutory compensation fund.

“While the Government has responded through these important legislative reforms, we would also encourage those within the industry to lead a debate about how gatekeepers themselves can take on more responsibility,” he said.

Medcraft said that where ‘gatekeepers’ did so, there would be less need for regulatory intervention.

“Self-regulation has an important role to play,” he said.