FPA criticised over Storm Financial
Financial services commentator Paul Resnik has used a column to be published in Money Management next week to strongly criticise both the Financial Planning Association (FPA) and the Australian Securities and Investments Commission in the wake of the Storm Financial collapse.
Resnik claims that the FPA appeared to have been too meek to condemn what he described as the misuse of financial products and warned that the resulting public relations fallout could create a loss of confidence in the broader financial planning community.
Resnik was particularly critical of the fact that the FPA had failed to criticise the manner in which margin lending had been utilised in the strategies recommended to Storm clients.
He warned there was a real risk the Government would see fit to regulate in circumstances where it might be argued that financial planners needed special qualifications before being able to promote gearing.
He said the Storm collapse had raised questions about the overall structure of the Australian financial planning sector and, in particular, the relationship between lenders, fund managers and dealer groups such as Storm.
Resnik said he regarded the Storm collapse as more than just a storm in a teacup and he believed it was likely it would be referred to a Senate committee of inquiry.
AUTHOR
Mike Taylor
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