A former financial planner and head of Professional Investment Services has slammed ASIC for “an unwillingness to communicate and a desire to bully”.
In a submission to the Senate Committee Inquiry into ASIC’s performance Robbie Bennett claimed the regulator was “not willing to participate in discussion and resolution – rather they are after ‘scalps’ and the perception of being an active enforcer (after the fact and to the wrong parties).”
Bennett claims extensive industry experience beginning in 1986, outlining a number of encounters with ASIC in which he claims the regulator showed a lack of understanding and an unwillingness to listen.
The former CEO alleges he raised issues with ASIC regarding failed financial companies Storm Financial and Westpoint on various occasions with ASIC representatives, but that the regulator failed to act.
Bennett claimed inconsistency in the way that the regulator prosecutes offenders, alleging ASIC merely looks to prove a point.
“Advisers and AFSL holders are seen as easy scapegoats and quick fixes – whilst the fundamentals remain unaddressed and flawed. Surely liability for failed products lies with the product manager who has the control, responsibility and ultimate benefit – not the intermediary,” he wrote.
“Product providers are not held accountable for their actions. If the product providers were held accountable for the information in their documents and what they do with the clients’ money most issues could be avoided. Remembering, remove product failure and you remove 98% of bad advice. Failing to ‘dot an i’ or ‘cross a t’ is not what causes financial losses.
“More regulation and red tape is seen as the only solution – on the basis that the end consumer is the ‘beneficiary’ of this increased regulation. Increased regulation that leads to consumers being provided with over 100 pages of advice is not in the best interests of consumers,” said Bennett.
The Senate inquiry into ASIC’s performance has so far received over 400 submissions, four of which came from ASIC defending its position and actions.
The regulator’s latest submission
, in mid-December, detailed changes to Commonwealth Financial Planning Limited's (CFPL) business practices as result of compliance with its enforceable undertaking with ASIC, as well as providing an update on CFPL’s compensation scheme and the methodology used to compensate clients.
Earlier that month, ASIC chairman Greg Medcraft released a video
accusing the media of attempting to "cast doubt on ASIC's good work and smear our staff and culture".