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Will planner disciplinary processes trump member retention?

Just weeks out from the Financial Adviser Standards and Ethics Authority (FASEA) finalising the financial planning code of ethics, the Australian Securities and Investments Commission (ASIC) has signalled professional bodies will need to put aside their fear of losing members if they are to play a meaningful co-regulatory code-monitoring role.

As a result of FASEA issuing and then finalising the code of ethics it will be up to ASIC to determine the selection of code monitoring bodies with both the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) being in the mix alongside the major accounting bodies and even major consultancy firms such as Deloitte.

FPA chief executive, Dante de Gori confirmed to Money Management earlier this year that his organisation was aiming to become a code-monitoring body.

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Questions were raised in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry about the FPA’s disciplinary process, particularly around its handling of planner, Sam Henderson.

However, ASIC has told the Royal Commission that up to now there has been “little scope in the regulatory regime for professional industry bodies to play a meaningful regulatory role”.

“Historically, these bodies have generally acted primarily as advocates in relation to proposed industry reforms, and the multiplicity of such bodies has also mitigated against any of them taking a strong leadership role in setting or enforcing strong ethical standards (lest they risk losing members to those bodies with less rigorous standards),” it said.

After its Royal Commission appearances and its difficulties in fully explaining its approach to the disciplinary proceedings entailing Henderson, the FPA has written to the Royal Commission stating that it accepts there is room for improvement, including imposing tighter time limits on case-handling.

“The FPA accepts that there is identifiable scope for improvement in the case management of the disciplinary process, including in particular by the imposition of more onerous time limitations on steps to be taken by the parties in the course of the investigation process and disciplinary proceedings that could improve the efficiency of the process without adversely affecting its efficacy,” the FPA said.

The FPA claimed, however, that the time taken to deal with the Henderson matter was owed to its limited resources, which had been stretched due to the requirements of the Royal Commission.




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The advice by Henderson Maxwell was 2016 and 2017, for the FPA to say it was too busy due to the RC is 'risible'. Bring on an external code monitor, the FPA is too conflicted, or under resourced as they've just admitted. And now of course, all our fees will go up, as there will be a new body and code to pay for. In addition to TPB and clearly licensee fees will rise due to compliance costs rising.

You're so right Bozo, the creation of more cottage industries like this will also help the govt reach it new jobs quota too! No self interest there either...

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