The Australian Securities and Investments Commission (ASIC) has reinforced its message that it is prepared to go up to the food chain when it detects poor financial planning practices with this week’s announcement of proceedings against AMP Financial Planning following on from a similar announcement with respect to Westpac.
While AMP Limited has said that ASIC actions relate to the activities of a particular planner, the regulator’s actions against Westpac also related to the actions of one of its former financial planners.
In other words, in the wake of some of evidence presented during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry and increased parliamentary scrutiny, ASIC has made clear it is prepared to pursue the bosses as well as the planners.
ASIC’s tactics were made clear during last week’s hearings of the House of Representatives Standing Committee on Economics when the regulator’s deputy chairman, Peter Kell said ASIC had “sought greater powers to take action against senior executives, not just the front-line advisors and sales staff”.
It was also made clear during that Committee hearing that the Government would be handing ASIC those increased powers consistent with the final findings and recommendations of the Royal Commission.
AMP Limited in responding to yesterday’s ASIC legal moves said the regulator’s pleadings had particularly identified the conduct of a former AMPFP adviser, Rommel Panganiban, who engaged in insurance rewriting.
The company said AMP FP removed Panganiban’s authorisation in 2014 and reported his conduct to ASIC with Panganiban being subsequently banned by ASIC in 2016.
ASIC’s action against Westpac similarly relate to the activities of a former planner banned in 2017 but argues that Westpac as the licensee was responsible for the breaches of the client best interests obligations.
In the proceedings against AMP FP, ASIC is alleging that licensee failed to “ensure its authorised financial planners comply with the best interests duty and related obligations under the Corporations Act”.
The message is clear. ASIC is targeting licensees for failing to better monitor the actions of their planners.
