By Ross Kelly
The Financial Planning Association (FPA) has said the nature in which commissions were disclosed to Westpoint clients, not just the size of commission payments, should be the main focus of any investigations into planner conduct.
Financial planners have come under public scrutiny and are potentially facing a number of legal actions over claims they received commissions in excess of 10 per cent for recommending products associated with the failed developer.
An FPA spokesperson said that the regulatory focus should be on ensuring that customers know what they are paying and what they are paying for.
The spokesperson did, however, add: “Given that disclosure requirements are already quite extensive, the FPA would need to carefully consider the implications on our members of any additional requirements. Disclosure itself does not guarantee good advice.”
The FPA’s comments came as it released a statement to the media confirming that it had received another 13 written complaints from members about Westpoint in addition to the 10 it was already investigating.
The spokesperson’s comments regarding commissions echo an earlier statement made by FPA chair Corinna Dieters to the public broadcaster.
“Commissions of around 10 per cent seem unreasonably high in respect to the investments that have been recommended to the clients. The FPA doesn’t have any specific requirement about the level of commission which is payable to advisers,” Dieters told the ABC in early March.
Advisers found by the FPA to be in breach of its professional standards face expulsion from the association and fines of up to $20,000.
