In a submission to the Senate’s ‘scrutiny of financial advice’ inquiry, the Professional Investment Services parent company said that the status quo for appealing ASIC determinations should be re-examined.
“Centrepoint appreciates that where a regulator is empowered to remove or restrict people or companies from a particular industry, those people should have a right to have the decision reviewed,” the submission states.
“However, we question whether the courts and [AAT] are the most effective forum to review ASIC’s decision.”
The submission proposes establishing a body made up of “ex-industry professionals, consumer groups and independent professionals” that can administer binding resolutions in a “cheaper and faster manner” than the tribunal and court system, pointing to FOS as an analogous example.
The AAT has not been successful in achieving its stated outcome to be an “alternative to the courts”, as evidenced by the fact that perpetrators of consumer financial losses “can re-enter the system after short periods of 18 months or less”, it states.
Centrepoint also makes the case for ASIC to be given greater powers to remove individuals from the industry, including managers and product manufacturers, as well as financial advisers.
Under the current system, intermediaries face “disproportionate” levels of risk and new enforcement abilities and mechanisms should be granted, the submission argues.
“In addition to banning and suspending individuals, ASIC should be able to limit their areas of activity, fine them or impose conduct/behaviour bonds, monitor activity beyond enforceable undertakings and have the ability to remove financial products proactively,” it says.
“If ASIC is to be a more effective regulator of financial services, it must not only be funded appropriately but it must also be supported by an administrative dispute resolution system that is effective at deterring low quality advice and practices.”
