Amid the continuing debate around grandfathering, the Australian Securities and Investments Commission (ASIC) has sent a thinly-veiled message to financial services firms about the folly of taking too long to abandon past regulatory practices.
ASIC commissioner, John Price has used a speech to an audit and risk committee forum to argue that companies which seek to cling to old regulatory norms risk losing the trust of consumers.
“As a regulator, we often hear the argument that moving first puts an organisation at a disadvantage, while other non-movers continue to benefit from their existing business model or position,” he said.
“However, if this position is causing people to lose trust in the business or the financial sector, it’s ultimately an unsustainable position for everyone concerned,” Price said. “Stakeholders in the system need to work together to overcome these barriers.”
Elsewhere in his address, Price pointed to the challenges which ASIC believed needed to be addressed, some of which went to adviser competence and professionalism.
“In ASIC’s Corporate Plan we have detailed what we see to be our five long-term challenges,” he said. “The first-mentioned challenge is aligning conduct in a market-based system with investor and consumer trust and confidence.”
“Within this challenge we have noted some factors that we believe are affecting the quality of financial advice and financial reporting, audit and insolvency practices,” Price said.
The ASIC commissioner then went on to detail these as being:
* gatekeeper competence,
* professionalism,
* independence, and
* ethical standards.
