Bernie Ripoll doubts that widening ASIC’s powers would necessarily prevent another Storm financial disaster.
While acknowledging that Labor had increased ASIC’s funding and doubled the number of commissioners, the chair of the Parliamentary Joint Committee on Corporations and Financial Services said that “you don’t want ASIC to be jumping out at every shadow”.
Ripoll asked if the Storm debacle was the result of a product failure or an advice failure.
“Does ASIC go into Storm at the peak of the market when it’s making heaps of money and close it down?” he asked.
“Storm had only one product: the ASX300,” he said, adding that the debate was “more complicated” than a simple product vs advice failure.
“It comes down to individual advice, the age, the circumstances. There’s nothing wrong with the model, depending on how you sell it.”
Ripoll said if, for example, a 73-year-old widow was sold a Storm-product with a 20-year horizon and a very highly leveraged model, then this was the wrong advice – not necessarily the wrong product.
Ripoll was speaking as part of a panel at the FPA conference in Brisbane on Friday.
The panel discussion ranged over various topics, most particularly opt-in and intra-fund advice, during a diffuse, meandering and often heated exchange.
FPA chief executive Mark Rantall again raised the FPA’s campaign to have the term financial planner protected by legislation and reiterated the term financial health described by Eureka Financial Group managing director Greg Cook, earlier in the panel discussion.
Rantall advanced Cook’s description, and said financial planning was crucial to Australia’s prosperity.
Ripoll said he had not thought of financial advice as a “profession in the national interest” but said it was a “good idea”.
However, he said the enshrinement of the term in legislation was “very problematic”.
Despite that, it was an idea that the parties “can still work toward”.
