The Australian Securities and Investments Commission (ASIC) has been placed on notice to adopt a more independent stance in the wake of the regulator having presented a Parliamentary Joint Committee (PJC) with preliminary data flowing from its most recent financial planning shadow shopping exercise.
The shadow Assistant Treasurer and Opposition spokesman on Financial Services and Superannuation, Senator Mathias Cormann, was strongly critical of ASIC when made aware of the circumstances surrounding the ASIC submission to public hearings of the PJC reviewing the Future of Financial Advice (FOFA) legislation.
He described the ASIC approach as "highly unprofessional and inappropriate".
"It was a blatant and clumsy effort by the independent regulator to support the government's partisan political agenda in relation to the contentious bits of FOFA," Cormann said.
"ASIC made assertions about the implications of their data for the FOFA bills, yet were not able to answer any questions about the detail."
Money Management was last week told that the key financial services organisations, including the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA), were given barely 24 hours' notice of ASIC's intention to utilise the preliminary data.
While it has been nearly five years since ASIC released the results of a financial planning shadow shopping exercise, the regulatory body has previously been fastidious in ensuring the accuracy of the data and consulting with the industry stake-holders before it is released.
However if ASIC believed the information would unduly sway all members of the parliamentary committee it was proved wrong, with Cormann saying the regulator's "unverified headline data didn't prove anything when it comes to the contentious bits in FOFA".
"It didn't support Bill Shorten's push to force people to re-sign contracts with their financial advisers on a regular basis, or his proposal to retrospectively impose a further layer of red tape and costs for consumers by doubling up on existing fee disclosures through yet another regular statement," he said.
However the Opposition spokesman did concede that the ASIC data, if verified, pointed to a need for a further raising of standards and professionalism within the financial advice industry.
"The reality is we are all in violent agreement on that," he said. "We also all agree that there is a need for reform in the financial services industry.
"We all agree that we need to introduce a best interest duty, remove conflicted remuneration arrangements and further improve the transparency and professionalism of the financial advice industry," Cormann said.
"In fact it should have happened ages ago. Instead Labor has wasted time because they wanted to attach all these things to FOFA being pushed by the Industry Super Network. That's where they lost it."
