CommFP can still improve, says ASIC
Further work is required by Commonwealth Financial Planning (CommFP) to improve its breach reporting despite the planning group having successfully fulfilled the disclosure requirements of its Enforceable Undertaking (EU), according to the Australian Securities and Investments Commission (ASIC).
ASIC deputy chairman Peter Kell has told the Senate Committee reviewing the performance of ASIC that the regulator was comfortable with the extent of changes made within CommFP but that breach reporting was an area where the regulator was continuing to work with the planning group.
"It must be remembered that there is a completely new management team in place with changed structures and remuneration models, but in the area of breach reporting more work needs to be done," Kell said.
"We believe CommFP has lifted its standards to provide better advice and this is happening but the breach reporting is one area where we are still doing more work."
Senator David Fawcett stated the media reports around the CommFP case appeared to be the pressure point when ASIC and CommFP acted and it was the transparency and public exposure around the issue that drove the issue forward.
ASIC chair Greg Medcraft agreed with Fawcett, stating that "transparency was the best antiseptic", and Kell stated that CommFP's EU is and would remain on the public record.
ASIC Commissioner Greg Kirk told the committee hearing that the problems with CommFP had continued after initial complaints because the internal culture of the planning group had not changed.
"The underlying issues related to bad advice and the culture were not removed. By the time we got to issuing the EU, and with the threat of investigation and legal action, CommFP was pushed to change its remuneration structures - that was the big difference," Kirk said.
ASIC also rejected recent claims by former ASIC junior lawyer James Wheeldon, who claimed before the inquiry that the regulator had acted inappropriately in granting relief to firms providing online superannuation calculators.
Wheeldon claimed the relief process "was tainted with corruption" - a claim rejected by Medcraft who stated that a ‘class order relief' was granted to all superannuation funds initially and then to investment calculators after public consultation.
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