ASIC a bully ‘after scalps’: Former PIS boss

by Amy Rosenfeld09 Jan 2014
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".


  • by red tape 9/01/2014 10:45:33 AM

    The 4th to last paragraph about "regulation and red tape" sums up the industry in a nutshell.

  • by planner to broker 9/01/2014 4:02:36 PM

    Do you think advisers over exposed their clients to Westpoint to get the 10% commission should be professionally liable? At what point does the adviser become responsible?

  • by Dan Isaak 9/01/2014 10:05:44 PM

    ASIC needs to realise that at this stage people are still reluctant to deal with brokers based on the mere fact that compliance is just still too hard. Red tape n hoops. The industry could be so much bigger if brokers were able to be more of an aid than a hassle. Sure, regulate, but also participate in making the industry educated. Imagine if at Uni during studies an individual failed a module and was thrown out of the entire course as a result. Where else could the industry then learn? Not even surgeons that kill patients are dealt with on that basis. They have ability to a fair hearing, I just thought that was normal to be reasonable. At the end of the day we are all here to make it easy, safe, and transparent to a consumer and we don’t want clients walking away because it’s just too hard. Believe it or not it does have an economic end to the economy, even if the average bare can’t see. People won’t even take the first step of buying if all they see is act after act. This results in less home owners, less workforce, less industry, and so on. How about a friendly easy to use system for all. There can still be regulation of financial services, but with an ability to listen. Errors do occur, but one should have ability mediate prior to ASIC ruling with an iron fist. They have an important role, but I don’t think AFSL holders want to be walking on eggshells every time the phone rings. Is it’s a client, is it a bird, no it’s ASssiiIC… Decent professionals will only leave the industry as so many already have…