Which advice issues are coming under ASIC’s scrutiny?
ASIC has shared its enforcement progress during the FY2022-23, resulting in more than 130 different investigations.
In its annual report, the regulator said it commenced more than 130 investigations, obtained 35 criminal convictions and almost $190 million in civil penalties and fines.
This compared to 107 investigations, 33 criminal convictions and $229 million in civil penalties in 2021-22.
Key outcomes this year highlighted by the regulator included its first enforcement action for greenwashing, interim stop orders regarding DDO, scam prevention and detection and breaches of directors’ duties.
Specifically in the financial advice space, the regulator said it is focused on financial adviser conduct and referrals of misconduct to the Financial Services and Credit Panel, completing the Life Insurance Framework (LIF) review, providing the findings for consideration in the Quality of Advice Review and updating guidance for financial advisers who provide self managed superannuation fund (SMSF) advice.
Of particular note for advisers was ASIC’s anti-hawking action taken against National Advice Solutions in February 2023. The firm saw its AFS licence cancelled and two responsible managers were banned from providing financial services for 10 years.
In a second case study, it noted ASIC action taken against finfluencer Tyson Robert Scholz to prohibit him from carrying on a financial services business in Australia in contravention of the Corporations Act.
"ASIC took this action to underline the importance of ensuring that anyone who recommends financial products or provides financial advice on social media complies with financial services laws that exist to protect investors."
The regulator also noted 92 per cent of candidates have passed the financial adviser exam since it was implemented in June 2019. During the financial year, the highest pass rate was 67 per cent in the February exam although this has since been beaten with a pass rate of 73 per cent for the August exam.
It is currently reviewing the Financial Advisers Register (FAR) to ensure it accurately reflects the status of financial advisers who did not pass the financial adviser exam.
ASIC chair, Joe Longo, said: “ASIC remains focused on maximising our regulatory impact by addressing areas of greatest harm. Our priorities reflect the key trends and emerging issues in our regulatory environment, including the growth in sustainable finance, Australia’s ageing population, emerging and disruptive digital technologies and associated risks, and product design and distribution.
“We have made considerable progress against these priorities throughout the year, and this work continues.”
AUTHOR
Laura Dew
Recommended for you
Adviser willingness is the key hurdle to the uptake of ESG matters by financial advisers; they should not feel afraid or embarrassed if they are less familiar with what clients are seeking.
In his first move since the acquisition by Count, former Diverger managing director Nathan Jacobsen has taken up a new leadership role in the financial advice space.
Medical grounds are no excuse for compliance failures as a Victorian AFSL is sentenced for failing to lodge annual financial reports.
The balance of ASIC enforcement activity is skewed towards civil rather than criminal cases, but the corporate regulator says it is seeking to redress this balance.
The old saying, " if you torture statistics hard enough and long enough, they will tell you anything you want to hear"
How glib of ASIC to quote that 92% of candidates have passed the adviser exam since introduction in 2019.
What's more telling that the adviser numbers in 2023 are under 16,000 but in 2019 prior to the introduction of the exam there were more than 29,000.
And dare I say it, I think there will be even fewer in the profession when 2026 education requirements need to be met.
Hmm, I really hope this is the last year ASIC don't declare a dividend for shareholders. I've participated in every corporate action over the last few years so as to not dilute my entitlement, and maybe I've been naive to assume that the increases meant that business was looking up for ASIC. Can anyone advise when the AGM is? I would really like to register my objection to the current situation.
National Advice Solutions basically changed their name and moved to a new company. They also did nothing about people giving unlicensed advice.
$190 million in civil penalties and fines in 2022-23 &
$229 million in civil penalties in 2021-22.
$419,000,000 in ASIC civil penalties and fines in the last 2 years and HOW MUCH OF THIS MONEY ASIC HAS BEEN USED TO REDUCE ADVISER LEVIES AS ASIC PROMISED IT WOULD BE ???????????????????
Sweet FA, la la, la la,
Sweet times never felt so good, asic, asic, asic,
Add new comment