ASIC still focused on bank culture and advice
Advice from banks remains a central concern with the Australian Securities and Investments Commission (ASIC) informing its investigators to take a harder line on those who breach regulations.
Addressing the Parliamentary Joint Committee (PJC) on Corporations and Financial Services hearing in Canberra on Friday, ASIC chair, Greg Medcraft, stated on a number of occasions that current efforts by banks and large financial service providers to change their internal culture were still behind expectations.
Medcraft stated that problems often arose with individuals but this stemmed from failures in the culture of an organization and its internal supervision to tackle those problems.
In response to a question from Senator Deborah O'Neill about two recent bannings of advisers from major banks Medcraft stated the "banks are struggling to deal with the cultural problems of many parts of their front line".
O'Neil said the committee was concerned that, despite the many cases of poor quality advice stemming from banks in recent months and ASIC's enforcement work, how was it possible that bank-licensed advisers were still being caught and banned?
ASIC deputy chair, Peter Kell, said O'Neill "had hit nail on head as this was the type of conduct we want to change" and pointed to its ongoing wealth management project which has been expanded to see if clients have been charged for advice that was not actually provided.
Earlier in the proceedings, responding to a question from Senator John Williams, on the severity of punishments for those caught breaching regulations and the likelihood they may be overturned on appeal at the Administrative Appeals Tribunal, Medcraft said ASIC delegates had been instructed to take a harder line.
"We are happy for ASIC delegates to push the envelope and to take more risk. We have made it clear we do want them to take more risk because community expects nothing less," Medcraft said.
AUTHOR
Jason Spits
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