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Dr. Mark Sinclair
Dr. Mark Sinclair, Mentor Education

ASIC looks at new measures to deal with unethical advisers.

5 November 2013

ASIC has taken measures to eliminate so called ‘bad apples’ from the financial advice industry by recommending new policies to deal with unethical operators with Australian financial services licences (AFSLs).

In its recent submission to the Senate inquiry regarding its performance, ASIC’s recommended changes include a new register for some financial advisers. The corporate regulator has called for an extension of its powers to register all individuals licensed to give financial product advice, as well as incorporate extensive employment history information. Currently authorised representatives must be registered with ASIC but no central register exists for employee representatives meaning that ASIC has no direct oversight of employee adviser representatives, including those who provide personal advice, and must rely on licensees to ensure the competence and integrity of these representatives.

ASIC has stated that the lack of a central register “can result in very real difficulties in ASIC’s ability to locate and take action against bad apples in the financial services industry.”  ASIC has also struggled to keep track of individual advisers, following the collapse of a licensee.

Other jurisdictions such as the United States and UK “currently administer or are moving towards individual disclosure and accountability of regulated advisers”, the submission points out. In August, the regulator voiced concerns that licensees were not adequately scrutinising the history and record of prospective authorised representatives.


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