Industry exclusion faces recalcitrant planners
Exclusion from the industry represents the major sanction facing financial advisers under the new Financial Adviser Standards and Ethics Authority (FASEA) regime.
The FASEA released the Legislative Instrument covering the code of conduct elements of the regime today, noting that the most serious sanction that could be imposed by a monitoring body was exclusion from coverage of the monitoring body’s compliance scheme.
Given that every planner will need to be a member of a code monitoring body, that would represent exclusion from the industry.
It is expected that the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) or a combination of both will be part of the code monitoring arrangements covering planners.
The explanator memorandum attaching to the Legislative Instrument said code monitoring bodies would have the power to investigate breaches and potential breaches of the Code, and impose sanctions set out in their compliance schemes if they determine that a breach had occurred.
It said potential sanctions that a compliance scheme might provide for included
• a warning or reprimand; and
• requiring the relevant planner to undertake additional training or counselling; and
• requiring additional supervision on a relevant provider; and
• requiring specified corrective action; and
• requiring an independent compliance audit of the relevant provider (if it is a licensee); and
• requiring the relevant provider to provide the services to the retail client again at no cost, or to reduce or waive fees.
Recommended for you
The corporate regulator has cancelled the AFSL of a Perth advice firm, with the firm having previously seen its licence temporarily suspended in 2020.
Having proposed changes earlier this year, ASIC has clarified how it will support licensees with additional relief under the reportable situations regime.
AMP has partnered with BlackRock and research house Lonsec to provide a model portfolio capability on its North platform that offers “portfolio customisation at scale” to advice practices of all sizes.
Money Management rounds up actions ASIC took against advice individuals in the first half for FY25 from exam falsifications to dishonest conduct.
