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Planners pin-pointed by FOS at Royal Commission

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry has been told that financial planners account for more than a third of serious misconduct identified by the Financial Ombudsman Service (FOS) since early 2012.

In a submission responding to questions from the Royal Commission, the FOS acknowledged that credit issues made up by far the most complaints it dealt with in a year, but pointed to the fact that financial planners/advisers accounted for the majority of serious misconduct investigations.

Pointing to its activities since 2009/10, the FOS submission said eight in ten (81 per cent) of all serious misconduct issues related to investments and failures to pay a FOS determination.

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“Financial advisors/planners account for more than one-third (39 per cent) of serious misconduct issues we have identified since early 2012,” it said.

Discussing unpaid determinations, the FOS also pointed to financial planning providers as being an issue.

“While the issue involves only a minority of our members who provide financial advice, the level of unpaid determinations at the end of December 2017 was almost one-quarter (24 per cent) of all determinations made in our investments and advice jurisdiction,” the submission said.

“Financial advisors/planners were involved in more than half (55 per cent) of all of these unpaid determinations, followed by operators of managed investments schemes (13 per cent) and credit providers (10 per cent).”




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If accountants and lawyers were forced to produce statements of advice and were covered by FOS, those statistics could be put into perspective. As they are, they mean nothing. You really can't compare complaints from a client who has a statement of advice, to someone doing direct to a product provider, where these is no paper trail.

Agreed Ben, plus the FOS process is quite one sided and provides no right to appeal for the planner but allows a client several attempts at rewording and 'having a go'.

While I agree we need to better eliminate the shonks from our profession and get back their money where possible, given planners are supposed to pay the 'determination' without the proper opportunity to be heard or appeal, little wonder a group of disgruntled planners or AFSL's never pay up.

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