Extend reference checking to management and boards says FPA

People providing general advice or in management and board positions should be subject to just the same reference checking as financial advisers, according to the Financial Planning Association (FPA).

The FPA has used a submission to the Australian Securities and Investments Commission (ASIC) to argue that “unprofessional and unethical participants in the financial planning profession can continue to influence detrimental consumer outcomes by being allowed to move into management roles”.

It said this could be allowed to happen without appropriate and mandatory reference checks being conducted.

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“For this reason, we continue to recommend that ASIC extend the law to directors, management and responsible managers, and not just advice providers,” it said.

"Additionally, the FPA has been a strong supporter of the central referee register maintained by the Australian Bankers Association (ABA) and is confused as to why ASIC would not just create a central register,” the FPA chief executive, Dante De Gori said.

He said the process being proposed by ASIC was laborious because it required the new licensee to manually search through multiple web pages as part of the reference checking process.

“It’s an inefficient regulation of a critical consumer protection policy,” De Gori said.

The FPA is looking to the ABA reference checking model arguing that a single register of designated referee details as opposed to individual referee contact details dispersed between licensee websites.

It has also formally recommended an extension of the ASIC reference checking protocol to other individuals supporting financial planners including directors, management and responsible management roles.




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Because the FPA dropped the ball on allowing ASIC to carve out the IntraFund advice racket. A bit late now.

Totally agree with the FPA. That's twice in a fortnight, am I mellowing or are they improving. ASIC Banning Orders should also mean that banned advisers can no longer act as an owner or director in their Practice. Still controlling the show, despite not being fit and proper people to be an Authorised Representative. These stains on our industry, prevent us becoming a profession.

Don't worry Old Fella, you aren't mellowing out. The FPA is an evolving organisation. It is not a person. It is not set in stone. It has regular turnover of senior management and directors, and as a consequence, ongoing modernisation of its policies.

It's ridiculous how many people are so hung up on things previous iterations of the FPA did, they refuse to embrace and support its good ideas in the here and now.

Absolutely!! Good ethics comes from the top!! Equally, poor behaviours can too!!

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