ASIC looks like it will be undergoing a major strategic and operational revamp under the stewardship of new chair Joe Longo.
Rumours have been circulating about senior leadership reshuffles since the former Herbert Smith Freehills financial services lawyer and Deutsche Bank general counsel took the helm at ASIC, and Longo’s maiden speech before the Senate Economics Legislation Committee provided some insight into the regulator’s new priorities. Referencing the “Commission-level changes” ASIC has been “buffeted by” recently, Longo said ASIC’s “strength and effectiveness as an institution can be enhanced.”
Apparently, part of that enhancement process will involve addressing the regulatory framework around financial advice.
Longo was asked by Senator Slade Brockman about the impacts of regulatory change on the advice industry. Brockman referred to the cost burdens, educational requirements and clients whom advisers have had to discontinue servicing due to “regulatory overload and fatigue,” and wondered whether ASIC had a view on its role in these issues along with a plan for addressing them.
In response, Longo described the problem as “significant and important”, adding that “it’s really important, in order for consumers and investors to participate confidently in our financial markets, that they are able to have ready access to advice they can afford and understand.”
He continued: “There’s no question that our system at the moment is complex and that there are a range of requirements that financial advisers have to comply with. As we know, there have been a number of recent legislative changes coming out of the royal commission that have relevance to this problem as well.
“For my part, I am concerned about this sector. I think it’s really important that consumers have access to affordable financial services advice, and it will be one of my priorities to see what can be done to address that issue.”
Perhaps unsurprisingly, ASIC was also quizzed by the Committee about the recent spike in the adviser levy. Commissioner Danielle Press responded that she didn’t have “anything useful to say” given that the mechanics behind the levy are “complex and difficult to explain”.
If Longo is serious about prioritising advice, though, addressing the unpredictable and arguably disproportionate costs advisers are being levied is a good place to start.
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