‘Lack of professionalism throughout the sector’

In his opening address at the ASIC Annual Forum in Sydney on Monday (19 March), ASIC chair James Shipton said that trust — and trustworthiness — is at the very heart of our financial system and the relationships that underpin it.

Mr Shipton stressed that every cent in the financial system is “other people’s money”, and that finance is not “just numbers on a computer screen” or “just a means to receive a commission or a bonus”.

“Nor is it just about institutions or companies. The institutions and companies — banks, large super funds, managed investment funds and so on — that we all usually focus on are merely veils for the individual Australians that stand behind them: individual shareholders, investors, consumers and depositors. It always comes back to people: finance is a vital component of real people’s lives,” the chair said.

“And, because we are dealing with other people’s money, we must never forget that financial risks can, and often are, catastrophic to real people. Financial harms can cause real human suffering.”

The ASIC boss suggested that greater levels of professionalism are needed in the financial services sector.

“If you put yourself in my shoes — those of a regulator — you would ask yourself ‘why are there so many examples of poor conduct in finance?’ One view is that there is a lack of professionalism throughout the sector,” Mr Shipton said.

“So, how do we heighten professionalism in finance? Like all complex problems, it is likely it will need a range of solutions. To start with, we need to recognise that it will need whole and undivided commitment across the entire financial ecosystem to address this challenge.”

According to Mr Shipton, one way to improve professionalism within the sector is for the industry itself, working with standard setting and professional bodies, to promote, and perhaps even require, professionalism within their sectors.

“In other words, there is a window of opportunity for the industry to take the lead without the imposition of a regulatory catalyst,” the ASIC chair said.

“Another very important point is that I do not exclude myself and my own organisation from the same responsibilities and standards we expect of [the] industry.”