Watchdog to keep a close eye on planners
The Australian Securities and Investments Commission (ASIC) has warned it may ramp up its surveillance of financial planning groups to coincide with tough new regulations on conflicts of interest for advisers.
ASIC director Greg Kirk said at the Financial Planning Association’s (FPA) National Principals’ forum earlier this month that the corporate watchdog would consider increasing its scrutiny of the financial planning industry once its new regulations on conflict of interest come into force on January 1, 2005.
The new conflict of interest laws require planners to document their conflicts and have adequate arrangements in place to manage them.
“We will consider more formal surveillance in the next year to ensure that soft dollar disclosure is meeting compliance,” Kirk said.
The regulations are in addition to the new self-imposed code of conduct on soft dollar payments introduced by the FPA, which also kicks in on January 1, 2005.
Kirk said the financial planning industry’s attempts to resolve some of the issues it had with soft dollar remuneration and conflicts of interest were being looked on favourably by regulators.
However, he warned the industry’s initiatives would need to be tested in practice before they could be hailed a success.
“A key will be how the industry initiatives can stick,” he said.
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