Sorry about photo coming out sideways, just make sure we come...

Sorry about photo coming out sideways, just make sure we come out of this bolt upright. Remember, those that repose on payday do not collect.


14-096MR ASIC response to ABC TV’s Four Corners program 5 May 2014

Tuesday 6 May 2014


It is important that the financial advice sector is subject to significant scrutiny. Many consumers rely on advisers to manage their life savings, and thus poor advice can have a major impact on their financial wellbeing.

ASIC has highlighted ongoing problems in the financial advice sector, including those arising from conflicts of interest and poor standards, of which Commonwealth Financial Planning Limited (CFPL) was a significant example. We have taken extensive enforcement action in this sector.


CFPL

Consumers lost money due to unacceptable conduct by some CFPL planners nearly six years ago. ASIC understands the significant stress those investors and their families experienced.

In response, ASIC took enforcement action against CFPL that achieved a number of outcomes, including:
1100 investors getting more than $52 million in compensation; eight advisers banned, and
forcing CFPL into an enforceable undertaking that has changed the manner and culture in which advice is provided.

However, ASIC acknowledges our actions against CFPL could have been better in three ways:
ASIC should have acted faster to remedy the misconduct at CFPL when it became apparent that the firm itself was not dealing adequately with its own poor advice problems.
ASIC's action against CFPL should have been more transparent at the time.
ASIC should have communicated more effectively with the whistleblowers who contacted us concerning poor practices at CFPL.

These issues have been detailed those in our submissions to the Senate Inquiry.