ASIC remediation regime could bankrupt small advice practices

Small advice businesses are already pushed to the wall by the big 4 applying 2020 rules to 2008 lookbacks and expecting 10 years' worth of fees to be remediated to clients who openly express their satisfaction with their advisers. ASIC is only one more layer to a process that is now well established. The small players should have come out on top after the RC, instead advice is firmly back in the hands of the big players under a different camouflage net. Sorry...did I say advice? I meant general info, scoped, intra-fund or whatever clever names keep cropping up. I salute the FPA and AFA for finally doing something, but it's too late. Changing the 30 days to whatever doesn't deal with the core issue of what actually advisers are being accused of that needs millions in compensation. It's like being wrongfully jailed and then being told you've had a win because they changed your baked beans from Black and Gold to SPC.

ASIC is corrupt and this is exactly the outcome they are looking for.

Less financial planners actively working or making a living, less work for ASIC.

Also, given how much they clearly favour their mates in union industry super (aside from these recent couple of token wet lettuce slaps conveniently timed during the parliamentary enquiry - so obvious), means less competition and more can be channelled into big union industry super funds.

Thanks FPA, it's a bit like talking a big fight inside the pub, when your mates are out the back getting pounded by a gang, and then you run out when it's nearly all over and cry, wait, the numbers were uneven, that's not fair! Too little, too late. And the feckless AFSL's who bowed to ASIC rather than fight them on remediation conditions, well they can continue scoffing down the 500M per annum in costs and no end in sight to complete the programs either.

As a small advisory business, after the GFC and its share market collapse, (blame on financial advisers who did not see this coming) our Professional Indemnity insurance premium went up to over $25,000 (4 advisers in the practice) and after another 10 years of no client complaints and no PI insurance claims, our premium after changing general insurance brokers 3 times, reduced to $15,000 a year. Over the last 10+ years, ASIC's black letter law aggression to keep its BANNING statistics up ... to justify its miserable existence (avoiding rehabilitation and reeducation of advisers to strengthen advocacy of standards of conduct) caused Australian insurers to refuse PI cover for advisers in Australia, so cover is only now available through London. The Hayne RC only made the PI market worse or thinner with suppliers. When small advisory practices spread across urban and regional Australia cannot get PI cover, ASIC first suspends their license, gives them another 3 weeks to find cover or their license is terminated. In the UK with advisory practices saw in 2020 a 400% increase in PI premiums, as reported in the International Adviser magazine by the British adviser who was a guest speaker to the November 2019 FPA Congress and they had no PI claims too. Investor Protection is provided by PI insurance cover, where claims take corporate lawyers at least 6 months to process. Why is ASIC pushing for 30 day remediation? Under Common Law for Procedural Justice and Distributive Equity (fairness), why is ASIC undermining Common Law processes and PI insurers process to cause further ruination of the advisory industry? Has ASIC looked at the Stats of product manufacturer's wrong doings? Why is ASIC so protective of corporate lawyers in financial institutions and acts as the grim reaper on small advisory businesses spread across urban and regional Australia, which employ more Australians per $ of turnover? The IT goof-ups by IT systems in financial institutions is getting worse each year, their corporate lawyers avoid all forms of compensation, and it is small advisory groups who go through the negotiating pain, acting in the ASIC RG244 Client's Best Interests, to pressure Institutions to fix their IT goof-ups and no one pays small adviser businesses for remediation for IT goof-ups. As I told one adviser, we are paid Adviser Services Fees to engage in duties and obligations to the client, we are not paid to issue bandaids for Financial Institutions goof-ups, which is lost productivity, lost opportunity cost in business revenue and ASIC will not get involved in systemic failures in financial institutions, because when corporate lawyers leave ASIC, they will seek a new career with Financial Institutions. Does this look like a hypocritic oath with corporate lawyers fraternity?

The system has worked hard to get big AFSL's out of planning and has succeeded with the BIG 4 banks all exiting.
However Australia you can't have your cake and eat it too. With the push for independence you open up the community to the risk of dealing with smaller institutions. Capacity to pay matters. The BIG 4 had heaps of capacity.

This means in simple terms even less remediation bills will be met. No doubt prompting another layer of regulation in a vain attempt to address the issue. This additional layer will result in even more businesses and jobs disappearing and even more customers left in the lurch without advice.
The RC completely missed the mark with it's narrow terms of reference. Do we need another one into why adviser numbers are falling off the cliff?