The Financial Planning Association (FPA) wants the proposed Australian Securities and Investments Commission (ASIC) financial services panel to take on a monitoring role, rather than focusing only on enforcement.

In a submission to ASIC, the association says the panel could monitor Australian financial services licence-holders and individuals.

“That could include monitoring compliance to ensure approved product lists were sufficiently broad, general advice warnings are being given appropriately and client ‘fact-find’ processes were adequate,” the submission says.

The role could also involve monitoring statements of advice and financial services guides for serious conflicts of interest.

“Such monitoring could be conducted by way of random or targeted audit as an effective way of identifying any compliance concerns before they result in consumer losses or complaints.”

ASIC has proposed three options for the panel’s composition, with varying mixes of industry, professional and independent participants. ASIC is represented in all three options.

The FPA favours the second option, comprising industry and professionals, but sees merit in creating a panel for a given case, consisting of members with specialist knowledge from within the industry and outside. 

“This would promote improved deliberation, especially where a decision turns on industry practice, and at the same time would not give too much relative weight to industry.

“In addition, the non-industry participant should have experience in consumer advocacy within the financial services industry.”

The FPA also wants the ASIC representative to be a lawyer, and for all reasons for decisions to be recorded and made public.

It says a decision needs to be made on concealing parties’ identities. And ASIC should consider identifying panel members who are excluded from a case due to conflicts of interest.