The Financial Planning Association (FPA) needs to shoulder at least some responsibility for the problems associated with regulation and the failure to consult on the part of the Financial Adviser Standards and Ethics Authority (FASEA), according to Queensland-based adviser and managing director of the Investment Collective, David French.
He said that the FPA’s criticism that with less than 50 days to go FASEA had not consulted with one FPA member on the Code of Ethics Guidance was as much a reflection of on the FPA as it was on FASEA.
“The unfortunate thing about the whole regulatory mess is that it stems from a weakness on the part of almost all of the agencies involved in the industry,” French said, also nominating the Australian Securities and Investments Commission (ASIC).
However, he said that instead of representing its members, the FPA seemingly took the view that could improve industry standards from within, not through improving the offerings of financial advisers, but by imposing more and more rules that the FPA was to administer.
French said he was also gobsmacked by the silence of FPA and other member-based organisations in dealing with the situation in circumstances where the fact of the matter was that even if the cost of restitution for wrong-doing was $10 billion, this represented less than four hundredths of 1% of the value of superannuation balances, home loans and asset supporting life insurance policies.
“On that basis we can say that most people who have a home loan, life insurance or who have sought financial advice got whatever they needed and are very likely better off as a result,” he said.
“That is a statistical fact. Why doesn’t the FPA say it.”