SPAA backs plucking out 'bad apples’ from advice sector

The SMSF Professionals’ Association of Australia (SPAA) has come out in support of the Australian Securities and Investments Commission’s (ASIC’s) drive for tougher measures to tackle the 'bad apples’ of the financial services industry. 

It comes as ASIC’s submission to the Financial Services Inquiry called for a national exam, a register of all financial planners and the power to ban those involved in managing financial planning businesses. 

ASIC said “there is a real and significant problem with 'bad apples’ in the financial advice industry” who switch employment when pinpointed and can attain new employment due to a lack of a proper reference check by a new licensee or supplied by the former licensee. 

“Most of the laws are aimed at controlling the minority as the majority do the right thing,” SPAA technical director Graeme Colley said. 

“We particularly support mandated reference checking for advisers that offer Tier 1 or complex advice and would welcome the creation of a central register for employee representatives.” 

SPAA has also rallied behind the idea of national examination for advisers before they can give personal advice on tier 1 products. 

ASIC also urged it gain the power to ban those in the management of financial advice businesses who are involved in violations.  

It said it was “critical for ASIC to have sufficient powers to remove persons from operating” within financial services if required.