Financial planners reacted with fury yesterday after it emerged that ASIC had written to over 300 consumers inviting ‘each and every one of them’ to make a formal complaint about any aspect of financial advice they were unhappy with.
The regulator met with a wall of silence from consumers after its June survey and then did not inform Finance Minister Nick Minchin it had received no complaints.
The news has led to accusations that ASIC has become single minded in its pursuit to smear financial planners, many of whom are too afraid to speak out because they fear a witch hunt if they do.
“It’s outrageous that the minister was not informed of this activity,” said one planner who did not want to be named. “I find it breathtaking that ASIC is actually writing to the public to create complaints. It’s entrapment. They want to burn us at the stake.”
He added that the vast majority of planners had a good reputation and that these kinds of exercises were unproductive and did not encourage co-operation between planners and their regulator.
“How can we work with a regulator that is like the Gestapo?”
Minchin told the senate in September that ASIC had not advised him of the outcome of the June survey, and only later admitted it had not received any queries as a result of it.
A spokesperson for ASIC, however, denied it was attempting to create complaints. “Following up with those people we surveyed for the shadow shopping survey was the responsible thing for ASIC to do,” she said.
The FPA’s manager for policy and government relations John Anning said he was disappointed that, in the context of ASIC’s recent shadow shopping survey, it didn’t mention the invitation for consumers to make formal complaints, or that no one to date had taken up the offer.
ASIC’s spokesperson defended the decision not to tell the Finance Minister: “All our activities are on the public record. We have been open and transparent about the whole process. We are here to work with financial planners, but also to protect the public.”
ASIC’s 2005/2006 shadow shopping survey into the financial advice industry concluded that advisers still had “significant work to do” before the quality of advice was acceptable.
