ASIC waves big stick on adoption of regtech

23 August 2019

The Australian Securities and Investments Commission (ASIC) has given an overt push to financial planning groups to embrace and explore technology, with its deputy chairman, Daniel Crennan QC, arguing that it may help minimise compliance risks.

In doing so, Crennan pointed out that the compensation paid to financial advice complaints stood at $119.7 million as at 30 June, this year, and to a 10-year jail sentence handed out to a financial adviser for engaging in dishonest conduct.

Opening an ASIX Regtech Financial Advice Files Symposium, Crennan said that technology’s potential was becoming more obvious and “we do expect financial services organisations to keep up”.

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“We’re all aware of the consequences of not keeping up, particularly relating to the provision of financial advice.,” Crennan said. “We only need to recall the $119.7 million in compensation as at 30 June 2019 that has been paid out to customers who suffered loss or detriment because of non-compliant advice given by financial advisers.”

Crennan pointed out that he was the sponsoring commissioner of ASIC’s Office of Enforcement and that the regulator’s Annual Report data showed that in January to June 2019, ASIC stopped 24 people from working in the financial services industry and that 13 of those gave financial advice.

“In this same six-month period, one financial adviser received a 10-year jail sentence for engaging in dishonest conduct,” he said. “Within the last six months, ASIC increased its overall Wealth Management–related investigations by 216%.”

He said that it was in these circumstances that, in order to improve risk-management and minimise compliance risks, firms had to include the capacity to explore, test, and implement ‘compliance-by-design’ regtech solutions within their business models.

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Does anyone understand this technocrat talk?

My sentiments exactly.

Apparently only computers are ethical, so we need to step aside and let the robots take over. ASIC is working too hard at the moment, banning those that were never registered for example.

Interesting to see ASIC talking up their forceful action on Financial Planners working in financial services with 13 stopped in the 6 months to June and our need to keep up with change.
BUT what about management within the banks licensees that condoned behaviours and from which the banks are running away from Financial Planning as fast as they can.
Those practitioners that have had their clients interests at heart are left to deal with the fallout educational, regulatory burden and personal / financial cost associated. Not to mention the good planners who have just had enough of being the scapegoats or hear of those suffering from mental health including some haven taken their lives given financial commitments entered into facilitated and with the encouragement of their licensees. Just sad that in the end the clients and individual planners will bear the cost with an inability to access nor provide quality affordable advice for average Australians when issue has been vertical integration !

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