ASIC boss warns financial advisers not to defy reforms

Treasurer Wayne Swan appointed former investment banker Greg Medcraft as the chairman of the Australian Securities and Investments Commission (ASIC) last month.

Medcraft expressed his support for the financial advice reforms that will include lifting the professional and ethical standards required by financial advisers, when he addressed the Financial Ombudsman Services conference in Melbourne on Thursday.

He said he had heard reports of some in the industry saying they knew of ways to get around the reforms.

"People should be pretty careful because our intelligence sources are pretty good," Medcraft said.

"It gets back to us, a lot of our information is coming from financial advisers."

He said the vast majority of financial advisers supported the proposals and wanted them to help improve the industry's image.

Medcraft said only one in five Australians sought financial advice and he believed there was potential for this to double.

He also said ASIC would shortly begin consulting the industry on best practices in advertising financial products and services.

He said ASIC wanted to see advertising which was balanced and explained the risks associated with the product being promoted.

"It should be about being responsible and doing the right thing," Medcraft said.A