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.
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.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
