Michael Guggenheimer
AMP Financial Planning (AMPFP) has revealed it considered a legal challenge over the post-shadow shopping investigation by the corporate regulator that resulted in an enforceable undertaking (EU), but decided not to proceed as the action could have led to a further unfavourable result for the financial services firm.
“If you look at if you have a difference of opinion, how do you go forward? Well, one is you agree on where the differences are and therefore move forward on that, or you test it in a court of law,” AMPFP managing director Michael Guggenheimer said.
“That [court action] could be long, it could be drawn out, it could be very public and we figured that we didn’t necessarily want to go there,” he added.
While he believed his organisation’s approach to working within the legal framework was sound, he recognised that there was no guarantee a court of law would share AMPFP’s interpretation of the situation due to the principles based nature of the legislation.
Guggenheimer said: “We had, for good reason, an understanding of a particular interpretation. I believe we established our business processes and practices around that interpretation, but who’s to say in a court of law that that’s right.”
Despite falling foul of the inexact nature of the legislation and its principles based formulation, he didn’t think there was any need for a more prescriptive approach by the regulator.
“What we would advocate is that maybe there needs to be a greater level of dialogue around the interpretation. I think everyone would welcome the opportunity to talk about interpretation, and the like, rather than just being left to one’s own devices to do so,” Guggenheimer explained.
He believed the episode could actually end up having a positive effect on the financial services industry as a whole if it results in more open dialogue with the AustralianSecurities and Investments Commission.
“Openness and the ability to understand will engender an environment we can all move forward in,” Guggenheimer said.
