The Australian Securities and Investments Commission (ASIC) has announced it will use the results of a controversial survey of the 20 largest financial services licensees to inform a further questionnaire targeting the next 30 largest licensees.
The initial survey of the largest 20 financial services licensees was conducted in 2010, and is the basis of a report, released today, identifying policy and regulatory issues surrounding the provision of financial product advice to retail clients.
ASIC chairman Greg Medcraft stressed the importance risk-based surveillance in improving standards in the industry and "holding gatekeepers to account".
"The analysis of the information gathered [in 2010] has informed ASIC’s Risk-Based Surveillance Program and enabled us to identify which organisations to monitor and what industry practices to prioritise," Medcraft said.
The resulting report found that licensees must manage conflicts of interest in business models; focus on adviser education; comply with stated procedures and weed out ‘bad apples; educate clients about risk and return to manage their expectations; and make sure complaints and compensation are handled well.
The follow-up survey of the next 30 largest licensees will consist of a shortened and more targeted questionnaire that is informed by the first questionnaire. The second questionnaire will be voluntary, and is expected to take place by the end of 2011.
