The Financial Advice Association Australia (FAAA) has addressed instances where its members have allegedly experienced “bullying” from product providers.
Speaking on a member webinar, Sarah Abood, chief executive of the FAAA, and David Sharpe, the association’s chair, discussed the issue of financial advisers experiencing alleged poor conduct from product issuers.
The topic is one that has arisen following meetings with FAAA members, Abood stated.
These centred around financial advisers feeling pushed or unfairly treated to use certain products by providers, or being banned in the worst-case scenarios.
“That issue of the relative powers of product issuers versus advisers is something that emerged in consultations with [FAAA] members. We have started to hear from some members that they feel they are being unfairly treated. We’ve heard some members being banned by product providers because they had criticised that product issuer for poor service or something of that nature,” she explained.
The CEO described these instances as “pretty disturbing” as advisers have a duty to work for their clients and not for product providers, following the lasting effects of the Hayne royal commission. The event saw the big four banks exit advice and the industry strive towards becoming a fully fledged profession with greater standards.
“The client has hired you and the legal relationship is that you are the representative of your client. So that [issue] has found its way on to our policy platform.”
Abood added that the advocacy body is currently looking into the issue to prevent these situations from occurring.
She continued: “It’s not appropriate that a product issuer should be able to stop an adviser acting for a client, who has engaged that adviser to support them. We are still a long way from recognising that financial advisers are not employees of financial institutions selling their products.”
Meanwhile, Sharpe encouraged advisers who have experienced this type of behaviour from product providers to report it to the FAAA.
He said: “We might be limited in what we can do, but it is important we start to build that argument so we can get policy change into the future. We are seen sometimes as a bit of a punching bag, so please send that through to us. You’re not on your own – other members have informed us of this as well.”
