Regulatory changes unlikely to stop deliberate fraud
One of Australia's most senior financial services regulators has acknowledged that the money lost in the Trio/Astarra collapse had been gone for a long time before the Australian Prudential Regulation Authority (APRA) acted with finality on the issue.
APRA's deputy chairman Ross Jones has told a Senate estimates committee that with hindsight "I think the money had been gone for a very long time".
Jones was responding to questioning from Opposition senators who suggested they needed clarity around what, precisely, happened with respect to Trio/Astarra in the context of the Government's current changes with respect to Stronger Super and the Future of Financial Advice (FOFA).
Jones said that if people were deliberately establishing arrangements to facilitate fraud then it was very difficult to catch.
Referring to the Parliament's consideration of the FOFA changes, the Opposition spokesman on financial services, Senator Mathias Cormann said he was trying to get a sense as to whether, if somebody with deliberate intent to defraud were to go down the same path again, the system was better equipped to deal with the issue.
"We are having discussions on things like forcing people to resign contracts with their financial advisers, which is quite low level compared to the sorts of things that we are talking about here, where hundreds of millions of dollars are put into hedge funds overseas…with the deliberate intent to defraud," Cormann said.
"It seems to me, and I am not being critical, in the way the circumstances developed there was very little on the face of it that regulators were able to do to intervene at an appropriate time to take corrective action," he told the APRA deputy chairman.
AUTHOR
Mike Taylor
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
