AS would be expected of the key financial services regulator, the Australian Securities andInvestments Commission (ASIC) ensured that its chairman, Jeffrey Lucy, finished high on the list of Money Management’s Top 10 Most Influential in 2006.
But, in truth, it was a less than stellar year for the regulator.
While ASIC gained largely favourable headlines as a result of its ongoing shadow shopping exercise, it earned considerably fewer laurels for its handling of the Westpoint collapse and the insider trading allegations against former television personality and Telstra board member, Steve Vizard.
Where financial planning was concerned, ASIC’s most significant initiative in 2006 was its extraction of an Enforceable Undertaking (EU) from AMPFinancial Planning.
The EU was a result of the regulator’s ongoing shadow shopping exercise detecting shortcomings in the superannuation switching advice being provided by some AMP planners.
For its part, AMP Financial Planning co-operated with the regulator in addressing the problems, which were identified by putting in place system changes.
AMP Financial Planning was undoubtedly the largest scalp collected by ASIC as a result of its shadow shopping exercise, but questions were raised about the manner in which the regulator had gone about its task and some financial planners suggested its actions were a disincentive to the provision of advice on superannuation switching.
And the regulator remains the subject of scrutiny over the manner in which it handled the Westpoint collapse and, in particular, whether it might have acted sooner to inform investors about the risks associated with mezzanine financing.
At the same time, questions are still being asked about ASIC’s approach to the prosecution of Vizard in circumstances where later evidence emerged in court with respect to insider trading.
In the meantime, the regulator is continuing its shadow shopping exercise and the financial planning industry remains braced for any anomalies that may be detected.
— Mike Taylor