IMAP not anticipating regulatory overhaul

The chair of IMAP does not expect a major overhaul of the managed accounts space when ASIC's focus returns to the MDA review.

Earlier this week, ASIC announced the MDA review is being put on hold, after "recalibrating" its regulatory priorities as it switches focus to face the challenges created by the COVID-19 outbreak.

IMAP chair Toby Potter said after hearing ASIC's presentation at the IMAP adviser roadshow in Brisbane earlier this month, he doesn't think the regulator will take any drastic measures against the industry.

"My take from the presentation was that for having spent well over a year looking at platforms, managed accounts and MDAs, they have not found cause to take drastic action," Potter said at the State of Managed Accounts webinar.

"There appears to have been some sort of discussion within ASIC as to whether in fact there will be regulatory change.

"Certainly, there didn't seem to be an imperative for regulatory change which suggests that the conduct of MDAs have generally been pretty good."

Potter said that he believes it is unlikely the regulator will move to take regulatory action in the MDA space at least over the next six to 12 months.

"ASIC had already said in the event of regulatory change there would be a consultation paper, consultation period and then there would be a further period before those regulations became effective," he said.

In relation to the code of ethics, Potter said IMAP has been working closely with FASEA on the impact of the code and those who give advice on managed accounts.

"We have had very good engagement with FASEA. We provided them with a working example of an advice business using managed accounts, where they acted as a portfolio manager, in association with an ASIC consultant," Potter said.

"That example has been generally well-received and we think that represents an example of proof that managed accounts, used in that way with advice firms, can co-exist with the code of ethics.

"That is a very important issue, and one that I feel is going to play out over the next six to 12 months."

Read more: ASICManaged AccountsIMAPMDAToby Potter
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