ASIC has defended its decision to release preliminary data from its Shadow Shop Survey at a parliamentary hearing earlier this week.
Just days after ASIC commissioner Peter Kell revealed top-line findings of its survey, the federal opposition and industry bodies questioned the appropriateness of releasing findings in the absence of a final report.
“While the survey is still not complete, we believed releasing top-line findings to the PJC (Parliamentary Joint Committee) was appropriate and timely,” ASIC senior executive leader for corporate affairs Matthew Abbott told InvestorDaily.
“This was a key committee discussing this crucial bill and our findings – while only top line – are acutely relevant to the policy debate.”
Abbott said ASIC alerted industry associations, such as the FPA and Association of Financial Advisers (AFA), of the top-line results and its intention to disclose the findings to the committee.
InvestorDaily understands the key concern for government and industry representatives revolves around claims ASIC’s findings were released without the survey’s expert panel being notified or a final paper having been written.
Federal opposition assistant treasury spokesman and PJC member Mathias Cormann said it was disappointing ASIC would place themselves in the middle of a political argument with a “clumsy stunt of releasing half-baked untested preliminary data”.
“ASIC’s use of such preliminary data to try and support a contentious political position pursued by the government was clumsy and inappropriate,” Cormann said.
ASIC was the independent regulator and should act as such, he said.
“Their job is to administer the law, not to take sides in partisan political debates,” he said.
“In any event, however flawed the data was they put to the committee, it didn’t actually add anything to the debate.”
If ASIC’s data stood up to scrutiny it supported the need for the non contentious parts of the Future of Financial Advice reforms, which Financial Services and Superannuation Minister Bill Shorten, in Cormann’s view, had failed to progress over the past 18 months.
“It would do nothing to support the need for opt-in or the retrospective application of a doubling up in fee disclosures,” Cormann said.
A spokesperson for Shorten said: “I am confident that ASIC’s actions were motivated by what is in the interests of consumers.”
FPA chief executive Mark Rantall said the advice association’s issue with the statements was that they were lacking in any detail in where that advice had come from.
“The underlying issue is that we support increasing standards and increasing education,” Rantall said.
“This highlights the need to legislate a code of professional practice and enshrine the term financial planner so that we actually do know and consumers know who they are going to is adequately qualified and adheres to higher standards.”
AFA chief executive Richard Klipin said it was difficult to comment on the ASIC findings in their preliminary form, however, it was clear the draft results “are not very flattering”.
“I think the AFA will reserve its comment on the specifics of the Shadow Shopper until we see the report come out. Therefore we can put comments into appropriate context,” Klipin said.
“I think we do need to put into context that these are draft results.”
