The Senate inquiry into ASIC’s performance has submitted its final report, and has slammed the regulator and CBA over misconduct by financial planners.
The report tabled by the Senate Economic References Committee has called for a Royal Commission to examine misconduct by advisers working for Commonwealth Financial Planners. The committee harshly criticised both ASIC and Commonwealth Bank for their response to the misconduct.
“ASIC's slow response to the CFPL case and lack of scepticism is also hard to explain. ASIC allowed itself to be lulled into complacency and placed too much trust in an institution that sought to patch over its problems. Moreover, until as recently as May 2014 ASIC clearly did not fully understand how the CBA was compensating clients affected by the serious misconduct at CFPL and another CBA financial advice business,” the committee said in a statement.
Senator Mark Bishop said the recommendation for a Royal Commission was not made lightly.
“The evidence the committee has received is so shocking and the credibility of both ASIC and the CBA is so compromised that a Royal Commission really is warranted. The CBA's focus is on downplaying the extent of wrongdoing and minimising the amount of compensation it has to pay. Meanwhile, ASIC has shown that it is not sufficiently sceptical of the CBA's actions and cannot hold it to account,” Bishop said.
The committee has also recommended ASIC be funded by industry levies in order to encourage better self-regulation of the industries it monitors.