Are advisers being asked to ‘dob’ each other?

The Federal Government is proposing legislative changes which would obligate financial advisers or licensees to breach report other organisations or advisers.

The startling proposal is included in a consultative document issued by Treasury around the Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2020 Measures)) Bill 2020 implementing key recommendations of the Hayne Royal Commission.

The explanatory memorandum released by Treasury explains a significant expansion of the situations that would generate a need for licensees or planners to report to ASIC including:

  • investigations about whether a specified breach or likely breach has occurred or will occur, and outcomes of those investigations;
  • conduct constituting gross negligence or serious fraud (to the extent this conduct was not previously considered a breach of the financial services law); and
  • where there are reasonable grounds to suspect that a reportable situation has arisen in relation to a financial adviser operating under another licence.
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And it is this third category which has raised eyebrows around financial planning policy specialists such the Association of Financial Adviser’s (AFA’s) Phil Anderson who said he believed there were significant implications for financial advisers and their licensees from such an arrangement.

The explanatory memorandum went on to explains that “financial services licensees will have to report to ASIC about serious compliance concerns, which are reflected in the reportable situations, in relation to individual financial advisers operating under another licence. A copy of these reports will need to be provided to the licensee responsible for the financial adviser at the time the concern arose. Such reports are due within 30 calendar days.”

Elsewhere in the legislation, the Government would provide qualified legal privilege from defamation proceedings for licensees sharing information as part of a reference-checking related to advisers moving between licensees.




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Reporting bad behaviour is an essential part of any profession and it is my belief that the FASEA Code already requires us to do this. Doctors and other health professionals and legal practitioners have been reporting each other for years. Why not us? Beyond applying more red tape, surely it is what we should have been doing for years?

yeah, I have been googling advisers around me and reading their FSG, privacy and other documents. then checking them against the FAR to see if there is any discrepancy in their authority, education requirements etc.as a kind gesture I will first send them an anonymous letter to correct it and give them 30 days to fix it

if they don't fix errors, i will then dob them into the professional bodies, fasea, or asic

I already have a list of people who are calling themselves a financial adviser who shouldn't be as they are in a supporting role and not on the FAR. as such, they are using a restricted term. accountants who are not licensed or anyone calling them a financial planner should be dobbed in as that is illegal to use now unless one is authorized to provide financial advice.

we also need to make sure that journalists and magazines do not use that term, and should pool money to threaten and sue them if they do not immediately comply.

the FPA and AFA don't need to come up with a marketing campaign. the FPA needs to use the cash they have to start suing left right and center anyone defaming or using a restricted term.

let's start with some journalists and accountants first and let's throw our weight around some.

Further to my previous comment, here is a link to FASEA's Guide: https://www.fasea.gov.au/wp-content/uploads/2019/10/FASEA-Financial-Plan...

Old fella, Who do you report stuff to? I have a deep mistrust of ASIC having watched how they behave.

The current reporting body is your own Licensee. They then need to deal with it.

If I report to someone from a different AFSL to my AFSL, I don't see them volunteering to fix a problem in a different AFSL, or having the capacity to fix up something outside of their area of control. I really can't see this working. ASIC is not interested, my AFSL is not legally allowed to act.

I understand it is their responsibility to do so as the current Code Monitoring Body. If you have no faith in your Licensee, go straight to ASIC is my only other thought. The more we weed out the problem advisers, the sooner we might reach a working environment with less bad publicity in the future. Or is that just my pipe-dream?

Yep, it's just your pipe dream.
The attack will continue until the industry is effectively decimated.

Yes, a dream Old fella. The profession will be employed advisers or staff giving conflicted product advice all paid for via intravfund advice fees which do not require advice to be provided and the client/member can not opt out of.
Do you see this changing?

I will bet it does not get approved. It would point ASIC straight to many industry fund SOA's. I had one the other day. Client came to me becuase she wanted to set up a retirement pension becasuse she was retiring. They told her everythings, except how to setup the pension, how much to take out, what she needed in retirement, or anything else about the pension or the government pension. ASIC routinely ignores any reports as "isolated and not worthy of investigating" at present. But if the law required reporting .......

I just had a family member charge $500 through uni super and part of the advice they recommended they – First home super saver scheme they are in their 50s and already have owned multiple homes, told her to report the planner

Why is there not a category for "there are reasonable grounds to suspect that a reportable situation has arisen in relation to financial advice provided by someone NOT OPERATING UNDER ANY LICENCE AT ALL".

Advisers routinely encounter clients who have given bad financial advice given by another practitioner. But in most cases that practitioner was an accountant, real estate agent, or super fund employee, who was not licensed as a financial adviser.

The regulators seem obsessed with destroying the lives of licensed advisers for minor administrative oversights, while completely ignoring the enormous consumer harm being caused by unlicensed advice.

The Soviets used the same system. Everyone was required to be a government informant and report anything that someone else said or acted out that may be unaligned with communist ideology. The result was that people used it as a weapon against those they did not like regardless of what actually happened. Why do we have auditors?????? Isn't it the auditors job to check for breaches?????? Australia has become a bureaucratic nightmare and it is getting worse.

Its not enough to have the Govt, the regulator and the legislation against the financial services space, what they really want is to turn us all on each other in an attempt to rot it out from the inside at no expense to them.
They want us to do the dirty work for them...they want us to be the spies...the moles...the informers and when it all gets really ugly, they will want us to turn on each other in an effort to survive.
The financial advisers and planners have only ever been the pawns in the game anyway......the people who have been exploited and coerced to generate billions of dollars of income for insurers and fund managers.
They are an expendable source.

Do you realise if we as Advisors and the Licencees has been more proactive in reporting misconduct and illegal behaviour within our own firms or at other firms then there would be no need for a royal commission and all these huge changes because Australians could trust this industry.

I say bring it on I haven’t got anything to hide I am complying with the law anyone who is against this well you have to question WHY, is it maybe that you have something to hide.

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