Delegates at Synchron’s annual conference in New Zealand have entered into a spirited panel debate over the extent of the powers of the Australian Securities and Investments Commission (ASIC).
Topics canvassed during the debate included whether the regulator should be vested with greater regulatory power and whether more industry auditors should be hired to develop greater compliance within the industry.
During the debate, in which delegates were asked to argue affirmative or negative positions on the limits of ASIC’s powers, one panel delegate said that ASIC needed to be given greater powers in order to protect investors from themselves.
If wider [ASIC] powers mean more lawbreakers were caught, it would result in greater protection for the industry, the delegate said.
The Government also needs to have more auditors to be able to uncover fraud with investor’s funds early and quickly, and for perpetrators to be prosecuted with a heavy hand, the delegate said.
The reason “rogue elements” could infiltrate the industry is because ASIC does not have enough audit control to catch them early and throw them out of the industry, he said.
Another delegate suggested that ASIC should also be given greater powers to regulate product providers and insurance companies more effectively.
Many times there are insurance products brought out that have hidden characteristics that aren’t mentioned to financial planners, the delegate said.
According to one panel delegate, ASIC should be vested with greater powers to work with product providers from the start to ensure a better product for the market, rather than waiting for it to “fall over”.
Facilitating a better outcome was better than handing out penalties afterwards, he said.
However, another delegate on the debating panel said disclaimer confusion caused by ASIC would increase with wider powers.
Even research houses that worked within ASIC’s guidelines were taken to court when products they researched collapsed, so the regulator was not really using the power it already had, the delegate said.
Several delegates suggested that an increase in ASIC’s powers would mean increased costs for planners and insurance companies, which would pass through to the consumer, making advice and insurance more expensive, while the powers would merely create more confusion.
Increased powers would also not enhance the role that financial planners play for consumers, the delegates said.
