The Australian Securities and Investments Commission (ASIC) is set to monitor the country’s six largest financial advisers, and operators of managed investment schemes as part of its 2014-15 surveillance program, to identify risky and unethical behaviour.
The watchdog will target the financial planning units of the big four banks, along with Macquarie and AMP for future surveillance of financial advice laws.
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Concerns regarding practices of financial advisers and their educational standards have been raised with the disclosure of fraud and misconduct by planners at Commonwealth Bank between 2006 and 2010.
ASIC stated that it would look at the quality of advice offered at the big firms, and the extent to which ownership conflicts of interest affect that advice.
ASIC will also monitor breach reporting and mis-selling of products, and also plans to hold pro-active risk based surveillance of financial advisers in the coming months.
Moreover, educational standards for financial planners have now been increased.
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By GlobalDataAn ASIC spokesperson also said: "The planning sector is facing calls from consumer groups to prevent conflicts occurring within the bank-owned advice arms through their vertical-integration model."
Vertical integration refers to an adviser being employed by the same firm that owns the products that the adviser is advising the clients to buy.
