Appearing before a routine scheduled public hearing on “gatekeepers and expectation gaps in Australia’s financial system” at the New South Wales State Library on Friday, ASIC deputy chairman Peter Kell said the regulator said the announced Senate inquiry into its handling of the matter would have positive implications.
“ASIC welcomes the inquiry and looks forward to the opportunity of providing the inquiry with substantial information on what we do, what we have achieved and what we seek to achieve,” Mr Kell said.
“The media is right to shine a light on the conduct five years ago of CFP because it reminds the public how far we have come in changing financial planning.
“There was unacceptable and unlawful conduct at CFP. Clients were given inappropriate advice and many suffered badly because of it.”
Mr Kell said that “conflicts of interest, arising from commissions-based payments, were at the heart of problems with CFP”, and assured the hearing that the FOFA reforms – and the “prohibition against commissions” in particular – would help prevent similar occurrences in the future.
The comments follow a strong admonition of the regulator’s handling of the Commonwealth FP matter from upper house parliamentarians last week, leading to bipartisan support for a motion to hold a Senate inquiry to assess ASIC’s whistle blower information management.
NSW Nationals Senator John Williams told InvestorDaily that he had deep, longstanding concerns about ASIC’s management ability.
“My concern is the delay when ASIC is informed of wrongdoing – the delay between when they receive the information and when they act," he said.
“in October 2008, the regulator received a four-page fax from the Commonwealth FP whistle blower, [and] sixteen months later, the whistle blower went and knocked on ASIC’s door asking ‘what’s going on? I’ve blown the whistle and they [the CBA] has promoted the bloke’.
“Seven [former Commonwealth FP advisers] have been suspended by ASIC from that organisation. How much more wrongdoing was carried out in those 16 months? How many investors were overcharged and perhaps even had signatures forged?” he added.
“I haven’t been a fan of ASIC since I started in this job.”
