The regulator will pay research houses to rate high-risk investment schemes under plans to protect consumers post-Westpoint.
The Australian Securities and Investment Commission (ASIC) is in talks with a number of ratings agencies to provide commercial research into property debenture securities, ASIC consumer protection executive director Greg Tanzer said.
Speaking to FPA members in Sydney on Friday, Tanzer said the information may be used to warn consumers about a fund's chance of default within 12 months and to reinforce the need for diversification when investing.
"I'm interested in understanding what the risk is and what it means in reality," Tanzer said.
Tanzer would not disclose which agencies ASIC has approached.
He said consumers, mostly retirees, lost around $1 billion through collapses of Westpoint, Fincorp and Australian Capital Reserve.
"Very few investors realised they were putting money into high-risk investments," Tanzer said
ASIC is investigating the directors and individuals associated with these companies as well as looking at similar businesses and the way they are promoted.
"ASIC will be looking at business models and their weaknesses and what should be done about that," Tanzer said.
ASIC will consider applying 'health warnings' to both unlisted and listed property debenture schemes to better protect retail investors, Tanzer said.
ASIC is undertaking a 12-month review of its systems and processes and creating specialist teams to help consumer protection and guard against insider trading.
"[It's] a more systemic approach to make sure we can avoid these problems in the future," Tanzer said.
Financial planners, industry associations and other stakeholders will be surveyed about what they think about the regulator and what could be done better.
ASIC is also reviewing its policies on external dispute resolution schemes.
