Regulator Reports Downturn in Adviser Bannings


The Australian Securities and Investments Commission (ASIC) has released its annual report stating that it has temporarily or permanently banned 10 advisers in the past financial year, while 12 Australian Financial Services Licensees (AFSL) have been cancelled or subject to conditions.

The report, which covers ASIC’s activities during the 2015-16 financial year also stated it had engaged in 130 high-intensity surveillance activities to monitor how financial advisers were complying with advice conduct obligations.

Of these surveillance activities ASIC stated that in 84 cases it detected and responded to failures by financial advisers to comply with their conduct obligations. The number was slightly lower than the 2014–15 report which stated ASIC had engaged in 166 surveillance activities.

Also lower than last year was the number of bans from providing financial advice, with 10 for the 2015-2016 period – four banned permanently and six for shorter period – compared to 2014-15 when 14 individuals were permanently banned from providing advice with a further 23 banned for a shorter period of time.

Many of these bans relate to ASIC’s ongoing Wealth Management Project, which began in late 2014 and is examining financial advice provided through the licensees of AMP, ANZ, CBA, NAB and Westpac and has already led to the temporary or permanent ban of 24 advisers.

The corporate regulator also estimated it would take under two years to review around 60% of all advisers, a reduction from the 2015 figure in which it estimated the same task would take more two years.

However, ASIC also indicated it expected to increase its surveillance resources by 50% in the next year – from 23 to 34 – while at the end of the last reporting period it had only 21 with a predicted decrease to 19.

In April this year, the Federal Government indicated it would give ASIC a further $127 million of which $57 million was earmarked for surveillance and enforcement in the area of financial advice with the regulator also expected to increase surveillance once a user-pays model begins from the second half of 2017.