Efforts to improve the quality of financial advice have regulators in Australia focusing on the enforcement of new rules in this area, including the obligation for advisors to put clients’ interests first.
The Australian Securities and Investments Commission (ASIC) published a report today detailing its enforcement activity over the first six months of 2016. In particular, the regulator says that it is investigating, and has taken action against, firms and advisors that have failed to comply with a set of reforms designed to improve the quality of advice, including the obligation to act in the best interests of clients, which were introduced in 2013.
Much of the work focused on ensuring that firms and advisors comply with these obligations falls under the ASIC’s Wealth Management Project that aims to lift standards at the country’s major providers of financial advice, both to enhance the quality of advice, and to secure remediation to clients that have suffered losses as a result of poor advice.
According to the report, the ASIC brought 24 regulatory actions as a result of this project in the first six months of the year, including handing down 14 suspensions, imposing three permanent bans, and bringing one criminal charge.
Over the next six months, the ASIC’s priorities include taking action against industry gatekeepers that fail to meet conduct standards; ensuring that firms and their advisors comply with the Future of Financial Advice reforms (including best interest); and, continuing with the Wealth Management Project.
“ASIC is working hard to maintain trust and confidence in Australia’s financial services industry. This report is a document of our strong track record and dedication to taking strong enforcement action where required,” said ASIC commissioner, Greg Tanzer.
Earlier this year, the Canadian Securities Administrators (CSA) launched their own consultation on a set of reforms designed to enhance client-advisor relationships, including the possible introduction of a best interest standard.
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