The Australian Securities and Investments Commission (ASIC) should be allowed to use the same legislative and regulatory powers it utilised to facilitate the provision of intra-fund advice to eliminate aggressive marketing and investment strategies, according to a new submission to the Ripoll Inquiry.
The submission, written by Smart Compliance managing director Brett Walker, argues that use of ASIC’s existing powers is preferable to “wholesale revision of the law”.
Referring specifically to the so-called “exemption and modification” power utilised by ASIC with respect to intra-fund advice, Walker said that irrespective of how it had been used it was proof that “ASIC has extraordinary powers at its disposal to regulate the markets as it sees fit”.
“With that in mind the job of targeting and eliminating aggressive marketing of investment strategies should be fairly academic,” he said. “But ASIC’s reluctance to do so indicates a lack of confidence in this power and we have asked the Ripoll Committee to give ASIC full assurance that it has the support of Government in using its full arsenal of powers.”
Walker said the submission also called for the suspension of the need for Statements of Advice to be produced except where they were requested by clients.
“We believe this will take the focus away from paperwork and permit advisers the headspace to get strategy right,” he said.
Walker said the submission argued that Financial Services Reform had been a failure to date because it had focused most people in the industry on form rather than substance, creating a legalistic approach to what is essentially a customer service relationship.
