Push for ASIC to act on legal grey area
The Australian Securities and Investments Commission (ASIC) is to investigate its regulation of authorised representatives of licensed dealer groups that do not publicly declare this affiliation in all their marketing collateral.
An ASIC spokesperson told Money Management that the regulator would “look into this area with the Federal Government. There is no specific law covering this area, and we are all aware of that.”
ASIC’s comments came in response to a statement to Money Management from the office of Nick Sherry, Minister for Superannuation and Corporate Law, which Money Management forwarded to ASIC.
The statement from Sherry’s office said: “The Rudd Government expects the corporate regulator to vigorously enforce the law.”
This followed lobbying by the Investment Advice Association (IAA) to force ASIC to act against offenders in terms of the Financial Services Reform (FSR) legislation.
Peter Johnston, executive director of the IAA, met with Sherry earlier this year and later provided him with legal advice from IAA lawyers that said “while there had been no change to FSR legislation, there appeared to have been a change in ASIC’s interpretation of the law”.
“Since 2004, ASIC has decided to eliminate the requirement for any practice to clearly demonstrate on any advertising or marketing material — including shopfronts, business cards and letterheads — to whom they are licensed,” Johnston said.
“Considering institutions now own 80 per cent of the advisory market, there’s a significant chance the unsuspecting public will not realise they are speaking to an adviser who has their owner’s best interests ahead of their own.”
The proposed ASIC investigation is likely to be welcomed by the Boutique Financial Planning Principals Group. It too has recently called on both ASIC and the Financial Planning Association to crackdown on what it claims is a widespread practice of authorised representatives posing as Australian Financial Services licensees.
AUTHOR
Mike Taylor
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