FSCP by numbers: What action is the panel taking?

FSCP financial advice fourth line complaints

20 March 2024
| By Laura Dew |
image
image
expand image

Money Management explores which actions the Financial Services and Credit Panel (FSCP) is taking when it considers the outcomes of cases. 

Last week, Money Management delved into which issues and breaches of the code of ethics and Corporations Act were occurring the most in the first 16 cases investigated by the panel. This found superannuation and statements of advice were particularly common.

The FSCP is a pool of industry participants, appointed by the responsible minister, that ASIC draws upon when forming individual sitting panels. It operates separately from, but alongside, ASIC’s existing administrative decision-making processes.

A sitting panel will be convened by ASIC to consider certain suspected misconduct by, or circumstances relating to, a financial adviser such as if it reasonably believes a financial adviser is not a fit and proper person to provide advice or a financial adviser becomes insolvent under administration and ASIC is aware of this.

ASIC said the possible actions that can be taken include warning/reprimand, directions and orders, such as to undertake training or supervision, and suspending or prohibiting an advisers’ registration. It can also make a recommendation to ASIC to issue civil penalty proceedings or accept an enforceable undertaking.

Looking at what actions are occurring as a result of the breaches, the most popular form in the 16 cases since the introduction of the panel is for an independent audit followed by pre-vetting of the advisers’ next 10 statements of advice.

In three instances, no action was taken by the panel. 

Actions taken:

Action  Instances 
Independent audit   7
Pre-vet advice SOAs   6 
Supervision  6
Reprimand  3 
N/A  3 
Registration change   2

Commenting, Lee Forde, financial adviser at Forde Financial Planning, said the actions are too lenient on the offending adviser. 

“Auditing the next 10 files won’t solve the problem; it won’t uncover systemic issues at those firms. What is needed is extra training. They should have to sit the FASEA exam again because they clearly haven’t learnt the lessons in the exam, and there are still poor practices operating. 

“Some of them are basic breaches, but there is no real consequence or deterrent in place.”

Both Forde and Fourth Line chief executive Joel Ronchi agreed the decision should also publish more information, similar to the ones published by the Australian Financial Complaints Authority (AFCA). These are often multiple pages long in comparison to the FSCP ones, which can be just a few paragraphs.

Ronchi said: “I would like to see more details in the outcomes. We are all used to the AFCA ones, so that is what everyone had expected from the FSCP, but that hasn’t been the case.”

Forde said: “The devil is in the detail and some of the outcomes are very ambiguous. If we had more detail about the reason for the action, then we would be able to learn from their mistakes.”

Read more about:

AUTHOR

Add new comment

The content of this field is kept private and will not be shown publicly.
 

Recommended for you

 

MARKET INSIGHTS

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

JOHN GILLIES

I really don't know what makes these guy's tick to think they can get away with it, it's the height of stupidity! They c...

1 day 22 hours ago
Seti

The world is increasingly over US imperialism. The country built on mostly forced military global outposts post ww2 , ...

4 days 21 hours ago

adviser losses will be less severe in 2024, yes because there are next to none left. ...

5 days 2 hours ago

Underestimating the cost of insurance by almost $75,000 in a Statement of Advice is among multiple reasons that a relevant provider has faced action from the FSCP. ...

4 weeks ago

A former financial adviser has been banned by ASIC from providing financial services for inappropriate advice, among multiple breaches....

6 days 22 hours ago

Iress has announced it is strengthening its security settings after suffering an unauthorised access of its systems over the weekend....

2 weeks 2 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND