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Complaints to the Financial Planning Association (FPA) for the first quarter of 2010 have centred on planners switching a client’s super funds or completing loan applications on their behalf, according to the FPA’s quarterly complaints and discipline report, published in Financial Planning magazine.
There were 11 new complaints in the quarter, while eight were finalised. That left a total of 34 ongoing investigations at the end of the quarter, of which nine had been referred to the FPA’s Conduct Review Commission (CRC), according to the report.
There has been a steady increase in complaints against planners moving clients between super funds without demonstrating a reasonable basis for the recommendation. In some cases this basis was listed as the new Binding Death Benefit Nomination capability, and while the platform does possess some advantages over other funds, planners needed to be able to demonstrate that it served as a reasonable basis for the recommendation, the report said.
Some cases involved planners asking clients to sign an incomplete application for a loan or financial product that the planner would complete later. This could lead to anomalies such as non-disclosure in risk-based products, which could lead to policy cancellation, or misrepresentation of a client’s financial services.
There were several complaints regarding the failure of members to oversee third party professional services. FPA members are obliged to provide supervision of third parties to whom they assign responsibility for professional services on behalf of a client, the report stated.
In some complaints clients claimed planners had not provided an adequate ongoing review service. This could be because the client was expecting a full review service without this service being expressly offered, while in other cases clients believed that an annual ongoing review service meant their portfolio would be constantly reviewed throughout the year, rather than annually. In both examples, the problem could be alleviated through effective communication, the report said.
