In its submission to the government’s consultation on the single disciplinary body, the AFA said provisions in the legislation allowed members to be appointed to the Financial Services and Credit Panel – which currently sits inside ASIC and is to be charged with disciplinary responsibilities – with no experience in the advice sector.
“We note in Section 141(2) of the ASIC Act that FSCP members could include those with experience in business, administration of companies or law,” the association said.
“We are not convinced that people with these backgrounds would have the necessary skills to consider disciplinary matters against financial advisers in the context of the extremely complex laws that apply to financial advisers. In our view, it is people who have a strong understanding of financial advice who would be best placed to participate in FSCPs.”
The AFA added that the law also gave ASIC the power to terminate members of the panel “seemingly without reason”, although panel members would be appointed by the minister.
“In the context that ASIC makes the decision to appoint individuals to specific FSCPs, our concern is that ASIC could choose to use panel members who hold similar views to them and can then choose to terminate panel members who have opposing views,” the association said.
The AFA also pointed to several flaws with the process of convening a panel under the proposed reforms, saying that if a panel member was disqualified from sitting for reasons such as a conflict of interest, “it appears possible that a panel could be reduced to as few as the Chair, and in our view this is not appropriate”.
Further, the association said the rules were not prescriptive enough around how meetings should be convened, and that the panel should be appropriately resourced with a secretariat function that could take formal meeting minutes and provide “support and training” to panel members.
“We note the provision for decisions to be made without meetings – whilst this might be good for administrative efficiency reasons, we are concerned that this could lead to an outcome where the system is set up to rubber stamp the recommendations of the FSCP Chair and that this would lead to decisions being dominated by the views of ASIC,” the submission said.
“Seemingly other than the part time participants in the panels, there will be no other resources that directly belong to the FSCP.
“We pose the prospect of there being some dedicated FSCP people that could constitute an FSCP secretariat and provide resourcing to ensure that there is support and training provided to the FSCP members and that there is some consistency in how matters are assessed.”
The association has previously criticised the lack of resourcing for the new system that significantly expands the scope of matters to be considered from a disciplinary perspective, with ASIC commissioner Danielle Press also suggesting at a recent industry conference that the regulator was concerned by the resourcing “challenges” the panel presented.
“I think there are challenges within the bill in that the way the legislation is written we must refer all complaints – that is a very interesting bar that is sitting in that regulation at the moment, and you might have also noticed we have no funding for this,” Ms Press told the Stockbrokers and Financial Advisers Association conference last month.
“We are trying to get our heads around how do we refer all of these at apparently zero costs. It’s not going through the industry funding model, but it creates some interesting outcomes when you’ve got all those complaints coming through. The cost of sending them through the full process will be significant and undermines the whole integrity of the system.”
How can this industry function when the regulator ASIC abuses its power, purely to drive an agenda which will ultimately harm the consumer. How could the government of the day, who professes to be on the side of small business ever be trusted when they have let down and harmed a vast majority of advisers who are stressed with ever changing levels of compliance as they see costs rise, profitability dwindle and sadly not even acknowledge the serious harm they are doing to the lives of those who practice in this industry. To appoint unqualified academics, lawyers, consumer group all who have NO experience in our industry with no business commercial experience yet preside over it is much like appointing a cleaner to be a brain surgeon. I have cancelled my FPA membership and will support any association that acts in the interest of not just the adviser, but also the consumer. Well done AFA and I also appreciate the efforts of the AIOFP. DITCH THE FPA
I can see now ASIC appointing representative from Choice and other related party “consumer activists”, and chosen University academics who have the same views as ASIC. It will be the equivalent of the FASEA board, then watch them mess the whole thing up!
Any Liberal Party people out there – give me just one reason why anyone in this industry should vote Liberal?
Not anymore, instead, I have joined The New Liberals. Vote with your feet!
There is no reason. The LNP have screwed this industry and the hard working people in it. Bring on the next election.
Goodbye Liberals… I hope they read this too.
because the alternative is Labor, and they want to ban financial advice. Direct your displeasure at the FPA and the lack of representation. These bodies followed recommendations presented to them by the FPA. It’s not a political issue it’s a lack of conflict free representation.
I have it out with Ben Marshan every chance it get dont worry about that. I also talk to my Liberal Federal MP. They know my views but dont listen – but the Liberal understand votes or lack of. Clear communication via votes.
Unless you’re AwareSuper the FPA won’t listen to you. Ben Marshan has said we’ve got plenty of members if you don’t like what we do than leave. Take his advice if you want representation. They’re looking after the institutionally aligned adviser.
Giving ASIC more control is never a good thing. The Liberal government loves Big Government and Big Business, but dislikes small business.
The proposed changes are of no benefit at all to the advice industry. It’s a red herring. And it just makes ASIC bigger. The Liberals love Big Government.
I hope they like being in opposition also, because that where there are going.
This is about the continued scamming of advisers by both the professional body and the Govt
Financial planning qualifications aren’t on the list of qualifications required by members of the disciplinary panel. That tells us all we need to know about the Government’s attitude towards our profession. This is another stitch up which hands ASIC even greater control.
Why do we have to constantly relearn the hard fought principals of the past? A jury is a collection of the defendants peers – criminal justice is set up this way so that the courts can consider the circumstances of the individual in a away that a judge might not.
How is it not the most obvious thing for the panel to be made up MAINLY by an advisers peers not disinterested, inexperienced public officials.
Good job by the AFA. This doesn’t look good.
C’mon Dante….you asleep at the wheel again?
Dante who??????
the guy fronting a Royal Commission and being asked why it takes 12 months to handle a complaint.
Well we’ve seen how the FPA handles complaints at the Royal Commission, and they’ve still got the same CEO so what would you expect.
This whole thing is a joke, is there any other profession that does not have industry representation, legal profession, medical profession, education & accounting we see long time experienced people within the given industry holding senior positions on boards and active in industry bodies providing guidance. What an absolute joke!!! I am fed up!!!!
Another step in the government’s “Death by Stealth” of the financial services profession.