ASIC naming of punished advisers unfair, says Dover
Dover Financial Advisers director Terry McMaster has said it is not fair that ASIC publicly “names and shames” the financial advisers it takes action against, arguing that anyone can make mistakes.
In a recent blog post, Mr McMaster said some of the conduct that ASIC has previously deemed as “nefarious infractions” can happen at any AFSL.
He said that, according to the 2014 ASIC report into retail life insurance advice, 37 per cent of risk advice fails to comply with laws relating to appropriate advice.
“Do you still think you could never make a mistake? Do you think your SOAs are perfect, and it could never be you ASIC enforceably undertakes?” Mr McMaster said.
“Anyone can make a mistake.”
Mr McMaster added that it is not fair for ASIC to be naming and shaming these punished advisers.
“We only see one side of the story,” he said.
“If more than a third of all risk insurance SOAs breach the Corporations Act, how can it be fair to single out one adviser and drag him through the kangaroo court of public opinion?
“Why are the big guys not named and shamed? The insurer? The BDM? The AFSL? The guys who trained him, paid him and encouraged him? The guys who profited from him? Why is it always the little guy at the end of that very long and very conflicted product distribution chain?”
Mr McMaster said while he can understand that ASIC does this to get its “deterrent message out”, in some cases, he has greater sympathy for the advisers, as they “have feelings too”.
“They have spouses, children and parents … The shaming is public and permanent,” he said.
“Why can’t ASIC do it more fairly, more privately? Why does it have to be a life sentence?”
Finally, Mr McMaster called on ASIC to do something positive.
“Maybe ASIC could run an SOA CPD day? Maybe ASIC could write a risk insurance guide with 50 practical tips to make the advice more appropriate?” he said.
“Maybe ASIC could create a list of 101 common SOA mistakes? May be ASIC could put out some really good template risk insurance SOAs?”
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