ASIC foreshadows ‘novel’ instances from legacy complaints
As financial planning firms brace for the possibility of having to deal with client complaints dating back to 2008, the Australian Securities and Investments Commission (ASIC) has acknowledged the likelihood of “novel” issues arising which may require further regulatory tweaks.
However, while it was ASIC which gave regulatory effect to the new legacy complaints regime imposed by the Government in the wake of the Royal Commission, the regulator made clear that it was not directly responsible for either the process or the outcome.
While handing the Australian Financial Complaints Authority (AFCA) the rules under which the scheme will operate, ASIC made clear it “has no role in individual complaints handling (under the AFCA Scheme) and will not intervene in the decision-making processes of AFCA”.
At the same time, serious questions were asked about whether financial planning licensees would be able to rely on their professional indemnity insurance coverage in circumstances where a succession of legislative changes were imposed over the 10-year legacy period, including the Future of Financial Advice (FoFA) changes.
What was already known about the legacy complaints regime and what had been confirmed by AFCA chief ombudsman and chief executive, David Locke, was that the authority had “identified thousands of complaints that could potentially be made to AFCA, based on those that were lodged but deemed outside the jurisdiction of previous schemes”.
And it appeared to be this reality which prompted ASIC to forewarn of the possibility of “novel” issues arising.
“The new jurisdiction, which covers complaints about conduct going back to 2008, may raise novel issues about how AFCA deals with complaints,” the ASIC statement said. “If these issues require or necessitate material changes to the scheme, then ASIC will need to review these as part of our ongoing oversight role.”
The AFCA chief executive made clear that while the legacy complaints would need to be lodged with AFCA in the first instance, they would then be referred to individual licensees for the possibility of resolution via internal dispute resolution processes.
Recommended for you
In its first FY26 action, ASIC has cancelled the AFSLs of two Sydney advice firms over their failures to pay industry funding levies.
The Federal Court has made interim travel restraint orders against two Falcon Capital directors, while also freezing one director’s assets.
For the 2025 financial year, all but one listed advice licensee has reported double-digit share price growth – but which licensee has seen the best performance and what activities have they enacted during the period?
Evidentia Group has confirmed its new executive leadership structure, having been formed from the merger between Evidentia and Lonsec Investment Solutions, to shape the future of managed accounts.
