ASIC has started the second phase of its review of Australia’s financial advice industry.
The corporate regulator will contact 30 Australian financial services licensees (AFSL) in the next week with a questionnaire on licensee business models, training of representatives, and product and strategic advice.
Licensees will have three months from the end of the year to respond.
“One of ASIC’s priorities is ensuring investors and financial consumers are confident and informed,” ASIC commissioner Peter Kell said.
Kell said the three elements in achieving that were educating investors, holding gatekeepers to account and understanding consumer behaviour.
“This review provides ASIC with important input into all these elements so that it can deliver positive outcomes for consumers,” he said.
“The review will also inform the financial advisory sector about current industry trends and ASIC’s compliance expectations. Many of the top 20 advisory firms that participated in the first phase of the review reported finding the exercise beneficial and helpful for improving their practices.”
He said this phase was an important part of ASIC’s approach to improving standards in the financial advice industry.
“The information gathered in the first phase, which covered the largest 20 AFS licensees, was an essential input to ASIC’s risk-based surveillance program enabling ASIC to identify what industry risks to prioritise,” he said.
ASIC intends to meet with all licensees next year to discuss responses and, if necessary, clarify gaps in information.
Individual feedback would be given to licensees and ASIC would issue a public report at the review’s conclusion, it said.
At the completion of phase two, ASIC will have been in contact with the 50 largest licensees providing financial advice to retail clients in Australia.
“The review’s first phase created an opportunity for ASIC to engage with the largest financial advice licensees and provide them with individual feedback,” Kell said.
“We expect those licensees in the second phase to also take a positive approach in engaging with ASIC and take the opportunity to shape the regulatory approach to the financial advice industry for the greater good of consumers across Australia.”
