What happens when you report a dodgy financial planner: Senate inquiry

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What happens when you tell the regulator, the Australian Securities and Investments Commission (ASIC), about a corrupt financial planner?

How long does it take ASIC to act? How are you treated as a whistleblower by ASIC?

These are some of the questions that a Senate inquiry will be asking ASIC when it investigates the performance of the government watchdog in coming months.

cba financial planners

The Senate voted unanimously to hold an inquiry into the corporate watchdog following revelations that ASIC took at least 16 months to act on information from corporate whistleblowers about serious fraud inside the Commonwealth Bank's financial planning division.

It's one of the biggest financial planning businesses in Australia. When ASIC did investigate the whistleblowers' allegations - 18 months after the initial complaints from the whistleblowers and following a second round of urging by them - it found that a number of Commonwealth Bank financial planners misled multiple clients with false information over a number of years, resulting in multi-million dollar losses.

The Commonwealth Bank financial planners typically failed to provide statements of advice and product disclosure statements and induced clients into financial products by making misleading statements and forecasts.

ASIC has since banned particular planners such as Don Nguyen, Simon Langton, Christopher Baker and Jane Duncan for a set number of years.

It also permanently banned Anthony Awkar because he forged the signatures of four of his clients. Commonwealth Financial Planning has worked with ASIC to rectify the fraud by its financial planners, and agreed to an enforceable undertaking at the end of 2011. "We acknowledge for some customers this took time," says Annabel Spring, group executive of Wealth Management, Commonwealth Bank.

The Senate's inquiry into ASIC will investigate its complaints management policies and practices as well as whether there are any barriers preventing ASIC from fulfilling its legislative responsibilities and obligations, plus ASIC's accountability framework and whether this needs to be strengthened.

If you would like to make a submission to the Senate Inquiry into ASIC, you have until October 21 at [email protected]. The report is scheduled to be handed down in March next year.

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Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.

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