In a submission to the ‘scrutiny of financial advice’ inquiry, Andrew Hungerford and Stephen Morrow of self-licensed firm Axiom Wealth expressed concern over calls to have ASIC deem certain industry groups as “professional associations”, for the purposes of the adviser register.
“Picking winners is something that should be left to punters not bureaucrats or politicians,” the submission states.
“There would appear to be a level of moral hazard involved in ASIC seeking to anoint particular professional bodies, particularly if this is done to the exclusion of other bodies or groups in the industry.”
The submission contends that associations deemed “professional” by the corporate regulator would receive an unfair boost to their “bottom line”, arguing instead that an “independently constituted panel” be given the task of overseeing the registration process and industry association membership issues.
“It has been our experience that, despite their articulations, some bodies do not adequately represent the breadth of interests within an industry or, as is often the case, they may put forward views that purport to be representative, but in reality they reflect the self interest of the professional body,” the submission argues.
A statement on the Axiom Wealth website explains that the boutique firm ceased its membership of the FPA in 2011.
The key issue to acknowledge is that vested interests continue to be the most influential determinant of regulatory outcomes. The key issue to address is how the vested interests are scrutinised. If ASIC are unable to see through the agendas of the vested interest groups, They should acknowledge this and seek help to ensure that the regulations are in the best interest of all consumers and industry participants. Lobby groups that serve part of the community should not be dictating how service to other community members.
Having worked for all the major regulators including ASIC, I agree that they are inexperienced and not do not have the resources to decide what is a professional association or not. The likes of FPA and AFA and other “notable” professional associations are too heavily tied to political aspirants and only represent a small proportion of the industry. The majority of advisers are not represented as they should because many professionals association’s inadequacies of servicing their membership’s requirements.