Consumers fear brokers 'have their own interests at heart': ASIC

by Mackenzie McCarty12 Sep 2013
“ Some investors and consumers confirmed that when they wanted to read disclosure documents to gain the information they contained, they often found the task too difficult.”

I tend to read it but don’t always understand it.” (Investor/consumer)

Some consumers were also sceptical about reliance on and the adequacy of disclosure.

They have a vested interest in promoting their products perhaps to the detriment of their client’s best interests.” (Investor/consumer)

However, ASIC’s survey also investigated the financial services industry’s overall attitude towards the regulator itself and found that, overall, stakeholders were positive about ASIC’s performance, with four exceptions, including not:

  • Acting quickly to investigate breaches of the law
  • Clearly communicating what ASIC is doing
  • Rducing the red tape associated with compliance, and
  • Being sufficiently resourced to do our job.

ASIC responded by saying it’s ‘committed’ to cutting red tape and that there are more improvements in the pipeline, including considering whether class orders are still necessary and continuing to help business by easing compliance with regulatory requirements - or advising the government to scrap regulation with no clear purpose.

“For example, we are considering whether disclosure is the best way to address certain market failures and whether new information channels are more effective.”

The survey was conducted in three stages between February and June 2013. The primary quantitative stage (a questionnaire) yielded a total sample of 1468 stakeholders.

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  • by mac 12/09/2013 10:22:53 AM

    We / ASIC have to decide if we are advisers or brokers. Me personally I think we do both but I really don't want to be burdened with the official title of "adviser" as that implies we have to act in the clients best interest at all times which is not possible with the way we get paid and the way some lenders are not available to deal with brokers. THIS IS NOTHING TO BE ASHAMED OF. At the end of the day the consumer / investor needs a product and we offer a selection. We may also give advice on credit structures etc but which can be many times more valuable than a few basis points but that is not product / lender specific.

  • by Keith of the West 12/09/2013 10:36:42 AM

    Typical government bureaucratic philosophy and tax payer funded thinking!.

    I cannot see one of then joining our industry and being tied to commission based income against the security the have every fortnight that their pay cheque is deposited to thier account

  • by hmmm 12/09/2013 11:06:13 AM

    That's weird......none of my clients were asked for their opinion....go figure..
    One curious point. If they thought that, why were they using a Broker?
    These are the types of surveys you do when you want to change something, and need a justification. Governments do it all the time; you say you've done a survey, and conveniently always get the result you want, so you can implement the decisions you were going to do anyways. And the best part is no one ever gets to see the results of the survey to legitimize the data.