New ASIC guidance for platforms a boost for investors

ASIC has moved to require investment platform operators to explain how they choose the different products on offer to investors through their platforms.

The strengthened disclosure requirements are part of a suite of new requirements following a review of the sector, which now has around $90 billion funds under management (refer 12-49MR).

Platforms can assist retail investors to manage their investment portfolios, including through their advisers.

‘Our updated guidance moves with the times and recognises that, with consumers taking a more hands-on approach to investing, their rights must be at the forefront of platform operators’ minds,’ ASIC Commissioner Greg Tanzer said.

‘Consumers may assume that products on a platform are ultimately going to work for their benefit. ASIC wants to ensure they make confident, informed choices and are aware of platform operators’ practices.’

Further requirements include ensuring they have adequate resources to conduct their financial services businesses, having appropriate corporate structures and compliance arrangements, having additional policies like voting policies and policies when consumers do not opt in to continuing to receive advice, and improved disclosure through a consumer warning acknowledgment.

Investors will also have access to a product issuer’s internal dispute resolution system when they have concerns about investments made through platforms and product issuers agree to do so. ASIC will give further consideration to extending this requirement to cover external dispute resolution and corresponding compensation arrangements.

The revised guidance is contained in Regulatory Guide 148 Platforms that are managed investment schemes (RG 148) and accompanied by new class orders.