The government is considering a move which would see the Australian Securities and Investment Commission (ASIC) granted the power to intervene and remove financial products from the market, as well as being able to add consumer warnings, alter marketing documents and impose distribution restrictions.
Leading the charge for change and to restore confidence is the new Assistant Treasurer Josh Frydenberg. First on his list of to-dos is to launch a public financial advisor register by the end of March, with the aim of giving people more confidence to seek financial advice.
By giving ASIC more powers to stop the sale and promotion of failed or fraudulent products, it should remove at least some of the concern of consumers that financial advisors were only out to make money for themselves. However, the move is likely to face opposition from the large product providers, who’s products are sold through a network of planners, with noises being made that it would result in less product innovation and cause market uncertainty.
Informing the proposed move is the Murray Inquiry’s recommendation that ASIC be given such powers. The Assistant Treasurer, who took on the role in December, is also reviewing the recommendations put forward by the bipartisan parliamentary joint committee on the ethics, professionalism and training of financial planners. This report, which was released on 19 December, would have greatly affect the big four banks’ financial planning services and AMP.
With 40 ASIC staff currently working on producing the register, the Assistant Treasurer is well on his way to delivering his first promise, however, it is expected that the register will not give details of planners’ qualification when launched, raising the question of whether the register is actually worth anything.
Read more at TheAge.com.au
Do you think more powers granted to ASIC would reduce the number of rogue planners and products on the market? Would a register of financial planners give you more confidence to seek advice? If not, what measures would help restore faith in the financial planning sector?