Former ASIC chair rejects FAAA idea of ‘priority hotline’ for advisers
Tony D’Aloisio, speaking in his capacity as a former ASIC chair, believes professional associations such as the Financial Advice Association of Australia (FAAA) should not have a dedicated communication line with the regulator as it would damage the regulator’s independence.
In its submission to the ASIC inquiry earlier this year, the Financial Planning Association (now the FAAA), stated it believed the organisation would benefit from a “priority hotline” with ASIC.
It said: “The current process for reporting suspicions of misconduct is longwinded. A simplified process with a priority hotline giving financial planners and other financial services professionals the ability to report inappropriate conduct or advertising, would help protect consumers. Financial planners should be accepted as reliable sources of reporting given their understanding of the law.”
Speaking at the Senate Economics References Committee’s ASIC inquiry, Senator Jess Walsh asked D’Aloisio whether professional organisations should be able to directly contact the regulator if they believe misconduct had occurred.
“One question that’s come up in the inquiry is the relationship between ASIC and some of the professional organisations representing regulated entities like liquidators and financial advisers and so on.
“What they’ve told us is they think that when they see a problem in their own profession they should have some sort of dedicated pathway to raise that problem from the supervision side into the enforcement side of ASIC and those bridges should be more effective,” she said.
Responding to Senator Walsh, D’Aloisio, who was chair of ASIC from 2007–2011 and is now chair of fund manager Perpetual, said he had worked with professional organisations during his time but would be concerned about them having a direct line to the regulator.
“I’d be concerned about a connection between a professional association and the chairman or the commissioners of ASIC in any formal sense. The key with ASIC is it has to be fully and totally independent. It should have the discretion to consult with whomever it might want, either in a consultation or by order, to require information,” he said.
“I don’t see a role for professional bodies to have any greater right than any other individual has to raise issues with ASIC and for ASIC to investigate. In my time I would not have pursued that level of connection between a professional association or industry group and ASIC. I would remain always at arm’s length.”
Also giving evidence at the inquiry, Jordan Tutton of Flinders University, who was speaking in a private capacity, said it is “certainly very difficult” when an agency receives a tip-off from a professional.
“In my experience working at a state level in an integrity agency, there is a certain tension where statistically it’s more likely that a tip-off disclosure from someone in a professional position or someone within the industry is more likely to be seen as legitimate versus one from the broader public. But at the same time, impartiality and independence is so critical to the regulator and confidence in the regulator.
“You would want to be quite careful before compromising that in any way.
“As soon as public confidence in the impartiality and independence of the regulator starts to diminish, a lot of other things will follow on from that.”
AUTHOR
Laura Dew
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ASIC are trying ot hid ebehind independence, when really they should be welcoming consurmner protection the biggest problem is that it is near on impossible to get information or report a problem to ASIC
Hah! “As soon as public confidence in the impartiality and independence of the regulator starts to diminish, a lot of other things will follow on from that.” You must be joking D’Aloisio.
More protection for a regulator that has VERY CLEAR biases and agenda's with how it operates. It does not act with impartiality nor does it even act ethically or without conflict of interest. It unfairly uses advisers as it's whipping boy and cash cow.
Providing advisers with a direct line would only help hold these rats to account - hence why a former 'cohort' jumps in to defend and protect them. Boys looking after their mates again is all I see here.
But a direct line of employment from big bank and activist groups through to positions of ASIC authority doesn't?
In his Macroprudential vertical hierarchical judgement, Mr Tony D’Aloisio since the ABC 4Corners report in 2010 https://www.abc.net.au/news/2010-06-14/one-shitty-deal/8952826 has a habit of blaming financial advisers, when this was a Case of a product manufacturer dealing in its own securities, which the SEC in USA prosecuted but ASIC never prosecuted, so Australian superannuants lost $1 billion. A Microprudential Governance framework model would require horizontal coordination between advisers, their professional association and the regulatory authorities. Industry models of coordination are advocated by Professor Johanna Weaver, Director of the Tech Policy Design Centre (TPDC) at the Australian National University, College of Law. D’Aloisio "“I don’t see a role for professional bodies to have any greater right than any other individual has to raise issues with ASIC and for ASIC to investigate. In my time I would not have pursued that level of connection between a professional association or industry group and ASIC. I would remain always at arm’s length.” Yes, he remained at arms lengths after the 2010 4Corners report when $1 billion was lost. In 2023, he again appears to reject horizontal coordination in information efficiency with professional associations against functional effectiveness and efficiency in the public interest of Domestic Governance.
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