Industry exclusion faces recalcitrant planners

planners financial planners sanctions FASEA Financial Adviser Standards and Ethics Authority Code of Conduct compliance FPA financial planning association AFA association of financial advisers breach

21 November 2018
| By Mike |
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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.

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