The risk of double jeopardy for financial planners sits at the heart of the Financial Planning Association’s (FPA’s) concerns about the Australian Financial Complaints Authority (AFCA) dealing with complaints dating back as much as 10 years.
The FPA’s submission to AFCA dealing with the Government’s move to empower the authority to deal with complaints dating as far back as the beginning of 2008 raised real concerns about financial planners being made to deal with issues they legitimately believed had been thoroughly determined years earlier.
What is more, the FPA questioned who would pay for AFCA’s handling of these issues in circumstances where it was not clear how the authority would be funded and argued that the pursuit of such matters should not be built into future industry levies raised to fund AFCA.
The FPA chief executive, Dante De Gori yesterday raised the question of whether such matters would actually be covered by professional indemnity insurance but the association’s full submission to AFCA made clear that a greater concern is double jeopardy.
In doing so, the submission made clear that AFCA will need to be careful with respect to how it exercises its discretionary powers.
“The FPA supports a legacy program being used to resolve complaints that have not been resolved, or have not been resolved appropriately, in the past as long as it does not undermine previously resolved complaints,” the FPA submission said.
“However, we have concerns about the potential for the discretionary powers being used to open up matters that have been resolved properly and appropriately.”
“Our concerns relate to double jeopardy and re-assessing matters previously resolved satisfactorily, the potential drain on AFCA resources, raising potentially unrealistic expectations of consumers that more compensation may be available,” the submission said.
“…whether PI would cover the re-assessment of a claim that has been previously settled, the implications for future PI, and funding of the re-assessment of claims previously settled to the satisfaction of both parties.”
Comments
I hope whomever is in government is planning for a government owned PI scheme because the current system is about to finally break (as I predicted ~8 years ago). Of course, Labor will be happy as they can finally destroy the independent financial advisory industry
These issues need to be raised by an organization that has no conflicts of interest. For the FPA to raise these issues whilst getting payments from AMP/ CBA it's going to result in a no win outcome. I'm really concerned regardless of the message that if it comes from a body connected to organizations tarnished in the royal commission it will result in outcomes opposite to what was intended. These messages need to come from Planners and NOT product makers.
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