ASIC, Financial Planning

ASIC not seeking compliance perfection

ASIC compliance perfection

ASIC has recognised the level of complexity in financial services legislation and is not expecting advisers to meet its standards every time.

The Australian Securities and Investments Commission (ASIC) is not expecting financial advisers to hold perfect compliance files and recognises the current state of regulation is too complex and prescriptive.

ASIC chair Joseph Longo made the comments during a question and answer session at the Stockbrokers and Investment Advisers Association (SIAA) 2022 Conference in Sydney chaired by SIAA chief executive Judith Fox.

When asked whether advice professionals should be concerned about ASIC looking for a perfect compliance file, Longo said: “I’ve been in financial services most of my life, I don’t go for perfection.”

He said the corporate regulator recognised financial advice legislation was complex and prescriptive as a result of many cases of poor advice leading to a wave of re-regulation going through the sector.

“We’ve now reached a point where it’s time to implement and make work what we’ve got,” he said.

“We can all agree on what we wanted to achieve, and we wanted consumers to trust the system and for advisers to act in the best interest of their clients.

“Where we are now is navigating a level of complexity and prescription that I think most of us are surprised to have to deal with.

“ASIC’s position on that is that we will do whatever we reasonably can within our power … to make the legislation more workable and to enable people to be able to go about their business in a way that they should be able to.

“They are the key parameters around what we are dealing with and it’s very hard in a situation like this for me to say what the level of compliance is.”

He also said ASIC was unable to make any changes to the adviser exam despite a number of industry bodies expressing concerns about its suitability and lack of accommodation for specialised advice.

“The exam is prescribed by regulation by the minister and we just administer it,” he said, noting exam provider ACER had administered the first 17 sittings of the exam before ASIC took over at the start of 2022.

“I acknowledge the concern, but this really is a matter for government to deal with. We took responsibility for the exam from 1 January without any power to modify the impact or effect of those exams.

“It’s well known these issues and concerns exist and we’ll do whatever we can to work with Treasury and the government to make changes.”

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