ASIC stretched thin across financial services

by Robin Christie12 Sep 2012

ASIC's enforcement capabilities are stretched thin across the full range of financial services disciplines, not only in the credit and mortgage broking industry.

This week, Australian Broker reported that it would take a full 37 years for ASIC to conduct a full surveillance of the entire credit industry at the current rate.

The mammoth task is mirrred in financial advice, where its superveillance team has only one staff member for every 115 AFS licensees authorised to provide personal advice.

ASIC admitted that in terms of advice, it relies primarily on “reactive surveillances” to monitor 98.5% of them.

According to ASIC’s surveillance coverage of regulated populations in 2011–12 report, the regulator has a team of 29 employees charged with surveying the 3,343 Australian financial services (AFS) licensees.

When it comes to the “top 20” licensees, which account for 26% of all advisers, ASIC estimates that it takes 1.7 years on average to conduct a surveillance operation.

The “next 30” licensees account for 10% of all advisers, claims ASIC, and a surveillance operation in this segment of the market takes 3.8 years on average.

This leaves 3,293 licensees that are authorised to provide personal advice who are monitored through “primarily reactive surveillances”. Judging by ASIC’s figures, this accounts for 64% of all advisers and 98.5% of all AFS licensees that are authorised to provide personal advice.

When the numbers are broken down further, ASIC reveals that it only conducts “reactive surveillances” on the 1,316 AFS licensees that are authorised only to provide “general advice”. This segment of the market accounts for 39% of all AFS licensees that are authorised to provide personal advice.


  • by Country Broker 14/09/2012 1:59:58 PM

    Really helpful information , basically we are paying for a licence that should include great enforcment procedures and we have expectations the whole industryis cleaning up. The broker who is a little bit "off" has a chance to cause in going damage unless some one reports them just great!!