ASIC Flags Enforcement Agenda

ASIC will spend much of the next two years pursuing its surveillance and enforcement activities in the financial advice sector compared with providing guidance on specific matters, according to its latest business plans.

The regulator released its 2017-18 business plans, which build on the back of its recently released Corporate Plan, and only a limited amount of effort will be given to providing guidance on advice related issues.

In the past, ASIC has taken a consultative approach to changes in the advice sector, notably during the transition to the Future of Financial Advice (FoFA) regime, but the business plan stated that ASIC would only provide guidance on the new standards relating to adviser professionalism and training and the life insurance statement of advice.

Instead, much of its efforts would be directed towards surveillance in the areas of advice compliance at the five largest financial advice firms, the quality of life insurance advice and changes related to unfair and unreasonable practices by life insurers with high levels of declined or withdrawn claims.

Accountants with limited licences, the quality of advice and level of best interests duty compliance related to self-managed superannuation funds, and ensuring the Financial Advisers Register was accurate and up to date would also make up part of ASIC’s surveillance activities.

ASIC’s business plan stated these areas of surveillance would also be where the regulator was likely to take enforcement action and that it would be paying particular attention to life insurance advisers with high lapse rates, advisers failing to comply with FoFA obligations and unlicensed accountants providing advice (see: ASIC Outlines Ongoing Focus on Life Insurance).