In a paper (pdf) presented by ASIC Chairman Tony D’Aloisio to the Financial Planners Association Conference he outlined the role of ASIC’s retail investor taskforce.
He said one of the taskforce objectives will be to address 7 specific issues with the industry:
• disclosure documents – length and complexity.
• statements of advice – whether ‘one size fits all’ is working.
• compensation arrangements for retail investors – are they adequate?
• lessons from Westpoint.
• remuneration arrangements and conflicts of interest.
• whether fiduciary duties apply and, if so, what that means.
The taskforce will take into account international developments (e.g. USA and UK) in examining these issues.
In relation to remuneration, he said ASIC will allow the market to ‘vote with its feet’ on the models investors prefer. To assist that process, ASIC will be active in applying the existing disclosure regime to its limits (as it has done in the unrated and unlisted debenture area) so that retail investors can make an informed choice and, in effect, can ‘vote with their feet’. While ASIC will not seek to pick ‘winner models’ (as such an approach could distort the competitive dynamics between models) it will be active in applying the existing disclosure regime.
