Watchdog emerges from the shadows

Shadow shopping exercises and the imposition of Enforceable Undertakings had arguably made relations between the Australian Securities and Investments Commission (ASIC) and the financial planning industry brittle at the start of 2007.

No sensible financial services operative openly criticises a regulator, but it was safe to say that there were plenty of people privately expressing their concerns about the ASIC approach.

Much of that attitude changed in May with the announcement that Tony D’Aloisio had been appointed to succeed Jeffrey Lucy as the chair of ASIC.

There was a particular expectation of a more co-operative and less confrontational approach from those people who had dealt with D’Aloisio during his period as chairman of the Australian Stock Exchange.

Nearly six months later, a range of key financial services spokespersons were telling Money Management there had been a discernible change in attitude on the part of the regulator — one that was arguably much more consultative than had previously been the case.

The first signs of change became evident at a Money Management round-table held in July, where the participants spoke of a less adversarial approach on the part of ASIC.

Port Macquarie-based financial planner Julie Berry, who is now the new chair of the Financial Planning Association, referred to D’Aloisio as being more focused on better informing consumers of the risk of investments than the financial planning industry.

At the same time, the head of Fiducian, Indy Singh, said it had been important for D’Aloisio to start from a position of trust in the industry rather than one of distrust.

Singh pointed out there were a lot of things financial planners did that were difficult to measure and that certainly could not be measured by means of a shadow-shopping exercise.

By year’s end, ASIC had not published the results of a shadow shopping exercise for 2007, and while the regulator caught some industry players on the back foot when in early November it announced it would be pursuing compensation for Westpoint investors, most acknowledged there appeared to have been a change for the better under D’Aloisio.

— Mike Taylor