The Association of Financial Advisers (AFA) is suggesting that it and other industry organisations should take a more proactive role in identifying and reporting miscreants and bad practices in the financial services industry.
AFA chief executive, Brad Fox, made the call at the same time as welcoming the Government’s increased funding for the Australian Securities and Investments Commission (ASIC) in preference to pursuing a Royal Commission as urged by the Federal Oppositon.
“It is only a small number of financial advisers who have tarnished trust in our profession,” he said. “ASIC has an important job to do, as do associations like ours, to identify those advisers, licensees and institutions that are not meeting the very high standards required of them under the law and our own professional standards code.”
But while welcoming the increased funding for ASIC, Fox sounded a note of caution with respect to the user-pays funding model for the regulator also endorsed in the Government’s statement.
“The proposal for ASIC’s costs to be recovered from all sectors of financial services is appropriate in theory, however the detail will be exceptionally important,” he said.
“The benefits in financial, relationship and total wellbeing for those that receive financial advice are beginning to be understood by the community. So, the cost impacts of this model need to be considered in light of accessibility and affordability of financial advice, as well as upon competition in the market place between institutionally owned financial advice and advice provided by a local community small business financial adviser,” Fox said.
