Don’t make us pay compensation for others’ failures – FSC
Members of the Financial Services Council (FSC) should not have to help underwrite a last resort compensation scheme in circumstances where they already stand behind their advisers and compensate clients when things go wrong.
A public hearing of the Senate Economics Committee inquiry into consumer protection in the banking, insurance and financial sector has been told by the FSC that its members do not believe they should be required to stand behind the poor advice of advisers they do not employ.
FSC senior policy adviser, Blake Briggs told South Australian Senator, Nick Xenophon that for the members the FSC covered, “we can say that they are well run institutions where their advisers clearly met a higher standard and the institution stood behind the advisers. When the advisers made mistakes or did the wrong thing, the institutions stood behind the advice that was given”.
He said he believed what Senator Xenophon was asking was: “can the costs of their [other adviser’s] poor advice be transferred onto other institutions that have higher standards for the advisers that they recruit?”
“Our guys go out, train their advisers better, stand behind the advice they give, and, if something goes wrong, cover it,” Briggs said. “They also have better ongoing systems and they have better adherence to the best duty in FOFA [Future of Financial Advice].”
“What you are now asking is: would we also stand behind the advisers that we do not employ?” he told the Senator.
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
