The second phase of ASIC’s monitoring of Australia’s dealer group sector could deliver a positive outcome provided the collection of the information does not burden licensees, an industry executive has said.
“I think that they’ve learned from the larger licensees that they dealt with in the first phase in terms of the number of questions, and the process and the timelines, so I think hopefully it won’t be as onerous for the next 30 licensees as it was for the first phase,” FPA general manager of policy and government relations Dante De Gori told InvestorDaily.
He hopes ASIC has taken feedback on board from its first phase and re-worked its method of monitoring to make it easier for licensees in the second phase.
“This is a worthy exercise, [but] it’s about how you collect that information and how you deal with it in a way that it’s timely, but not too much of a costly burden on the industry,” he said.
De Gori expressed concern that the smaller licensees don’t have the resources to deliver what ASIC is after as thoroughly as ASIC wants.
“[It’s ASIC’s] job and I think they need to do it and I think a lot of good can come out of it with respect of the information that they gather about the survey,” he said.
“No one knows what they will find but I think at the end of the day, if it can deliver positive outcomes for consumers in terms of correcting things or improving things that participants in the financial service industry do then yes, it’s positive.”
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.
“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.
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.
