In an exclusive interview with The Australian Financial Review, Joseph Longo says Australians deserve better financial advice and protection from volatility in crypto assets.
Tash Sorensen To overcome the under-provision and high cost of financial advice, Mr Longo pledged to lighten the regulatory burden on financial advisers to help make their services more accessible and affordable for Australians.
Seven months into the job as the country’s top corporate and securities regulator, Mr Longo said crypto, superannuation, consumer protection, and bolstering the resilience of the stock market to technology disruptions would be focus areas for 2022.The Australian Financial Review“But part of my job is to be thinking about when things go wrong with a market disruption or market event.”Globally, the value of crypto assets has plunged from almost $US3 trillion in November to about $US2 trillion, as the prospect of rising interest rates causes investors to shift their asset allocation.‘My personal warning to people is to be careful and don’t put all your money into crypto.’“I’m worried about consumer harm and the number of people in Australia exposed to crypto,” Mr Longo said. “We know from anecdotal and factual evidence between us and the ACCC, there is definitely an uptick in the number of scams and misconduct leading to people losing money by attempting to invest in cryptocurrencies and assets.Cryptocurrency investorsInternational Monetary Fund warned last week that bitcoin is moving more in line with stock prices than pre-pandemic, raising the risk that volatility in crypto assets transmits a shock to destabilise financial markets. Mr Longo admitted ASIC could not eliminate risk due to its very broad areas of responsibility and fast-evolving market practices, so it was important that consumers thought carefully about their investment decisions.“We still have too many people who are making poor decisions around their finances. “If you’re putting a big proportion of your wealth into a single investment, you really need to be careful. “We need to encourage people to really get advice before they make any big risk-taking decisions to put at risk a significant portion of their wealth with things like managed investment schemes.”A major barrier to financial advice is the relatively high cost, with the median fee for financial advice rising 30 per cent in the last three years to $3256 per client, according to researcher Adviser Ratings.Mr Longo said the “cost for advice puts a lot of Australians off,” adding that ASIC was working with the financial advice industry to help reduce the red tape burden.“We do have a very complex regulatory framework around financial advice. “A priority for us will be working with the advice industry to figure out ways to administer the legislation in a way that is less prescriptive, and more efficient and cost-effective. “We will do whatever we can to work with the industry within the existing law to promote cost-effective and compliant financial advice.”