ASIC only allowed to ban advisers under new disciplinary regime

Financial advisers who breach obligations under the Corporations Act 2001 where the Australian Securities and Investments Commission (ASIC) believes banning is not appropriate will be subject to the Government’s proposed single disciplinary body, the Financial Services and Credit Panel (FSCP).

The new regime’s exposure draft legislation said the FSCP would consider ASIC’s evidence and decide whether to impose an administrative sanction, infringement notice, both, or no action.

The panel would consist of at least two industry representatives and an ASIC staff member as chair.

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The minister of the day would determine the people eligible to be appointed to an FSCP. A person, it said, needed experience or knowledge in at least one of the fields: business, company administration, financial markets, financial products and services, law, economics, accounting or taxation.

When ASIC convened an FSCP, ASIC must appoint at least two members from this pool. An ASIC officer would be the chair of each FSCP.

Financial planners, financial advisers, and tax financial advisers who were authorised to provide personal advice to retail clients would be subject to the FSCP. People only providing general advice would not be subject to the panel.

Stockbrokers, actuaries, and insurers were all subject to disciplinary action by the FSCP if they were giving personal advice to retail clients.

“An Australian financial services (AFS) licence holder will only be subject to the FSCP where it is also a relevant provider and the breach relates to that person’s conduct as a financial planner or adviser. Otherwise, breaches by a licensee will continue to be dealt with by ASIC,” it said.

“The FSCP can impose a range of administrative sanctions, an infringement notice or recommend that ASIC commence court proceedings seeking a civil penalty.

“The administrative sanctions that the FSCP can apply are a warning or reprimand, directions to the adviser to undertake additional training or supervision, or suspending or cancelling the adviser’s registration for a specified period.”

The FSCP would also be able to improve an infringement notice in specific breaches carved out as Restricted Civil Penalty Provisions (RCPPs). These breaches included:

  • Not meeting the education and training standards;
  • Not complying with the code of the ethics;
  • Not meeting the requirements for supervising a provisional relevant providers;
  • Not following a direction or order given by the Financial Services and Credit Panel; and
  • Giving financial advice while unregistered.

Currently, an infringement notice amount for an alleged contravention of a RCPP was 12 penalty units for a single contravention, which was $2,664.

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What a complete joke. The only people that should be on the panel for a financial planning case, are qualified, experienced, practicing financial advisers. ie. Peers. This is the way every other profession works.
Financial advisers continue to be bullied, harassed and persecuted by faceless government bureaucrats and lawyers who know ZERO about financial advice. This needs to stop.

not sure practicing advisers would work. There is a conflict, but also a bias, either against the competition or for the peers.

It seems to work fine in other professions. In fact it would be astonishing if it wasn't the case. Imagine a doctor being banned by a lawyer with no medical experience.

Of course another stitch up of Real Advisers, more layers of Regs and Authorities to answer too. More Fees and forms and more threats for not ticking 1,000 boxes to comply.
But not General Advice, provided by call centre jockeys, no education, no qualifications, no BID, no FARSEA, no AFSL compliance, no SoAs and no extra disciplinary body.
Call centre jockeys that provide vertically owned sales of single products by their employers Industry Super Fund can do what ever the hell they like with no consequences.
Another abomination from LNP against Real Advisers.
We must get rid of these clowns !!!!!

What about unlicensed parties? Those who hold themselves out to be a Financial Adviser but are not registered in any way. Or Accountants who continue to provide advice to clients regarding the appropriateness of an SMSF, establish an SMSF and rollover super from retail or industry super whilst not holding authority to do so.
The system must place the same penalties on those who hold themselves out to be advisers as it does on those of us who are rightfully educated, experienced and authorised to provide financial advice.

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