ASIC calls on industry to remove poor advisers
Thefinancial planning industry is struggling to rid itself of incompetent and outright fraudulent advisers due to dealer groups fearing defamation reprisals and a tarnishing of their brands.
According toAustralian Securities and Investments Commission(ASIC) executive director for consumer protection Peter Kell, the matter is a continuing issue.
“We will be looking at what sort of problems confront firms when they’re trying to deal with advisers that have a record of misconduct to ensure that we can minimise this phenomenon of poor performers, and in some cases, even fraudulent advisers moving from firm to firm,” Kell says.
“One of the reasons that has been suggested to us is that defamation is a possible problem, but it also seems to be the case that some firms are not being as rigorous as they should be in checking references.”
Financial Planning Association(FPA) general manager for policy and regulation June Smith says the FPA has been liaising with ASIC on the subject.
“We’re looking at this issue and investigating whether it’s possible that a code could be established, given the various confidentiality and privacy legislation, to enable dealer groups to exchange information,” Smith says.
However, Smith warns that the flip side of the issue is ensuring advisers are protected from accusations.
“We’re encouraging whistle blowing and to contact us or the regulator anonymously. Our aim is to rid the industry of incompetent advisers,” she says.
Kell believes the issue is a problem the whole industry needs to confront.
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