At the recent Institute of Managed Account Professionals Independent Thought Conference in Sydney, ASIC commissioner Alan Kirkland (pictured) addressed the evolving responsibilities of Australia’s financial services sector.
Kirkland’s remarks, delivered on Oct. 15, highlighted the need for a collective approach to improving consumer outcomes, noting that this responsibility extends beyond the regulator to all market participants.
“At ASIC, the financial well-being of Australians is core to what we do,” Kirkland said, outlining the regulator’s activities in licensing, monitoring, and educational outreach.
He added that the responsibility for good consumer outcomes does not fall solely with ASIC. It is the responsibility of everybody who operates within the financial system.
Kirkland detailed the expectations for various stakeholders. Licensees are required to provide financial services that are efficient, honest, and fair.
Advisers must act in the best interests of their clients, offering advice that prioritises client needs.
Operators of managed funds and platforms are expected to uphold their obligations as responsible entities, ensuring compliance and diligence in their operations.
He noted that ASIC’s own role includes ongoing supervision, surveillance, and enforcement to ensure compliance across the sector.
“For ASIC, it means ensuring compliance through our supervisory and surveillance work and addressing misconduct where we see it,” Kirkland said.
He also referenced ASIC’s educational initiatives, such as the Moneysmart website, which aims to support informed financial decisions.
A significant portion of Kirkland’s address focused on the management of conflicts of interest, particularly in the context of managed accounts.
He discussed ASIC’s recent consultation on updates to Regulatory Guide 181, which had not been revised since 2004.
The proposed changes are designed to clarify how licensees should identify and manage conflicts, and to ensure that arrangements are robust and fit for purpose.
Kirkland explained that the updated guidance is informed by ASIC’s recent surveillance and enforcement activities.
“We expect licensees under that obligation to engage deeply, and on a regular basis, to understand where conflicts may arise and ensure that their arrangements for addressing those conflicts are adequate,” he said.
The final version of the revised guidance is expected by year-end.
The managed accounts sector has seen rapid expansion, with funds under management rising by an average of 24% annually since 2019, according to IMAP data.
Kirkland noted that this growth, particularly in Separately Managed Accounts, has prompted ASIC to initiate a review of compliance in the sector.
The review will examine how licensees and advisers are meeting their obligations, including the management of conflicts of interest and the provision of appropriate advice to retail clients.
Kirkland addressed ASIC’s enforcement actions, reporting that 16 advisers and 40 managers or brokers have been banned this year for failing to meet their obligations.
He acknowledged that while most industry professionals act appropriately, misconduct by a minority can have significant consequences for consumers and the sector’s reputation.
Recent enforcement cases, such as those involving Shield and First Guardian, have required substantial ASIC resources and have resulted in court proceedings, stop orders, and other regulatory interventions.
Kirkland noted that ASIC is also pursuing civil penalties and compensation for affected investors in these matters.
Kirkland concluded by reiterating the importance of ongoing vigilance and ethical conduct across the financial services industry.
He encouraged all participants to understand their roles, recognise potential risks, and remain attentive to the outcomes experienced by consumers.
“Everybody in the system has a role in promoting good consumer outcomes,” he said.
ASIC’s ongoing investigations and enforcement actions reflect a continued commitment to consumer protection and sector integrity, with a focus on collective responsibility to ensure positive outcomes for Australians engaging with financial and insurance products.
