A legal loophole that allows financial advisers banned from practicing to be able to continue to promote their professional services online has emerged.
In March, Professional Planner revealed that a number of disgraced financial advisers slapped with a ban by the industry watchdog continue to self-promote online to unsuspecting clients.
While the ASIC announced a renewed focus on protecting consumers from financial harm, the watchdog’s powers stop short of ordering that financial advisers stop promoting their professional services online.
Several financial advisers banned from practicing have been publicly shamed in the media, with ASIC issuing media releases in high profile cases.
However, some financial advisers who had been permanently banned from practising continue to list themselves as online on either websites or professional social media platforms like LinkedIn.
ASIC has confirmed that banning orders prohibit specific conduct, such as the provision of financial services, but they do not require banned individuals to remove online listings.
An spokesperson for the regulator tells Professional Planner that it makes its banning decisions public through ASIC Gazette notices and media releases. “We also update our publicly accessible registers with the relevant details of our administrative actions, including bannings”.
“We rely on complaints and other intelligence to inform us if someone is engaged in conduct that amounts to a breach of the banning order,” the ASIC spokesperson says.
ASIC says those seeking a financial adviser should head to the MoneySmart website to find a suitable option, which puts the onus on the client to do their own checks and balances to ensure that a financial adviser is fit to practice and reputable.
The fact that the ban doesn’t cover self-promotion activities raises serious questions about whether ASIC’s protection measures go far enough.